Correlation Between MYR and VINCI SA

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

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

Diversification Opportunities for MYR and VINCI SA

-0.43

Correlation Coefficient

MYR  VINCI SA

Very good diversification

The 3 months correlation between MYR and VINCI is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and VINCI SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VINCI SA 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 VINCI SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VINCI SA has no effect on the direction of MYR i.e., MYR and VINCI SA go up and down completely randomly.

Pair Corralation between MYR and VINCI SA

Given the investment horizon of 90 days MYR Group is expected to generate 1.96 times more return on investment than VINCI SA. However, MYR is 1.96 times more volatile than VINCI SA. It trades about 0.32 of its potential returns per unit of risk. VINCI SA is currently generating about -0.29 per unit of risk. If you would invest  13,324  in MYR Group on September 4, 2024 and sell it today you would earn a total of  2,692  from holding MYR Group or generate 20.2% return on investment over 90 days.

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

MYR Group  vs.  VINCI SA

MYR Group

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MYR Group are ranked lower than 25 (%) 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.

VINCI SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VINCI SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, VINCI SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MYR and VINCI SA

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

The idea behind MYR Group and VINCI SA 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.