Correlation Between PVH Corp and MYR

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

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

Diversification Opportunities for PVH Corp and MYR

0.86

Correlation Coefficient

PVH Corp  MYR

Very poor diversification

The 3 months correlation between PVH and MYR is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding PVH Corp and MYR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYR Group and PVH Corp 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 PVH Corp are associated (or correlated) with MYR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYR Group has no effect on the direction of PVH Corp i.e., PVH Corp and MYR go up and down completely randomly.

Pair Corralation between PVH Corp and MYR

Considering the 90-day investment horizon PVH Corp is expected to under-perform the MYR. But the stock apears to be less risky and, when comparing its historical volatility, PVH Corp is 1.25 times less risky than MYR. The stock trades about 0.0 of its potential returns per unit of risk. The MYR Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  14,661  in MYR Group on September 12, 2024 and sell it today you would earn a total of  1,229  from holding MYR Group or generate 8.38% return on investment over 90 days.

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

PVH Corp  vs.  MYR Group

PVH Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PVH Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, PVH Corp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

MYR Group

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MYR Group are ranked lower than 23 (%) 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.

Pair Trading with PVH Corp and MYR

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

The idea behind PVH Corp and MYR 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.