Correlation Between BrightView Holdings and Mistras

Can any of the company-specific risk be diversified away by investing in both BrightView Holdings and Mistras at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BrightView Holdings and Mistras into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BrightView Holdings and Mistras Group, you can compare the effects of market volatilities on BrightView Holdings and Mistras and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in BrightView Holdings with a short position of Mistras. Check out your portfolio center. Please also check ongoing floating volatility patterns of BrightView Holdings and Mistras.

Diversification Opportunities for BrightView Holdings and Mistras

-0.49

Correlation Coefficient

BrightView Holdings  Mistras

Very good diversification

The 3 months correlation between BrightView and Mistras is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding BrightView Holdings and Mistras Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mistras Group and BrightView Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on BrightView Holdings are associated (or correlated) with Mistras. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mistras Group has no effect on the direction of BrightView Holdings i.e., BrightView Holdings and Mistras go up and down completely randomly.

Pair Corralation between BrightView Holdings and Mistras

Allowing for the 90-day total investment horizon BrightView Holdings is expected to generate 0.7 times more return on investment than Mistras. However, BrightView Holdings is 1.43 times less risky than Mistras. It trades about 0.06 of its potential returns per unit of risk. Mistras Group is currently generating about -0.05 per unit of risk. If you would invest  1,551  in BrightView Holdings on September 16, 2024 and sell it today you would earn a total of  134.00  from holding BrightView Holdings or generate 8.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

BrightView Holdings  vs.  Mistras Group

BrightView Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BrightView Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, BrightView Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mistras Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mistras Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with BrightView Holdings and Mistras

The main advantage of trading using opposite BrightView Holdings and Mistras positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BrightView Holdings position performs unexpectedly, Mistras can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mistras will offset losses from the drop in Mistras' long position.

The idea behind BrightView Holdings and Mistras Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.