Correlation Between MYR and Stratasys

Can any of the company-specific risk be diversified away by investing in both MYR and Stratasys 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 MYR and Stratasys into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MYR Group and Stratasys, you can compare the effects of market volatilities on MYR and Stratasys 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 MYR with a short position of Stratasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYR and Stratasys.

Diversification Opportunities for MYR and Stratasys

0.84

Correlation Coefficient

MYR  Stratasys

Very poor diversification

The 3 months correlation between MYR and Stratasys is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and Stratasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratasys and MYR 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 MYR Group are associated (or correlated) with Stratasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratasys has no effect on the direction of MYR i.e., MYR and Stratasys go up and down completely randomly.

Pair Corralation between MYR and Stratasys

Given the investment horizon of 90 days MYR Group is expected to generate 0.64 times more return on investment than Stratasys. However, MYR Group is 1.57 times less risky than Stratasys. It trades about 0.31 of its potential returns per unit of risk. Stratasys is currently generating about 0.14 per unit of risk. If you would invest  9,788  in MYR Group on September 18, 2024 and sell it today you would earn a total of  6,880  from holding MYR Group or generate 70.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

MYR Group  vs.  Stratasys

MYR Group

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MYR Group are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, MYR reported solid returns over the last few months and may actually be approaching a breakup point.

Stratasys

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stratasys are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Stratasys unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MYR and Stratasys

The main advantage of trading using opposite MYR and Stratasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYR position performs unexpectedly, Stratasys 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 Stratasys will offset losses from the drop in Stratasys' long position.

The idea behind MYR Group and Stratasys 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.