Correlation Between TriMas and Myers Industries

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

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

Diversification Opportunities for TriMas and Myers Industries

-0.02

Correlation Coefficient

TriMas  Myers Industries

Good diversification

The 3 months correlation between TriMas and Myers is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding TriMas and Myers Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myers Industries and TriMas 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 TriMas are associated (or correlated) with Myers Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myers Industries has no effect on the direction of TriMas i.e., TriMas and Myers Industries go up and down completely randomly.

Pair Corralation between TriMas and Myers Industries

Considering the 90-day investment horizon TriMas is expected to under-perform the Myers Industries. But the stock apears to be less risky and, when comparing its historical volatility, TriMas is 3.36 times less risky than Myers Industries. The stock trades about -0.37 of its potential returns per unit of risk. The Myers Industries is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,132  in Myers Industries on September 28, 2024 and sell it today you would earn a total of  11.00  from holding Myers Industries or generate 0.97% return on investment over 90 days.

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

TriMas  vs.  Myers Industries

TriMas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TriMas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, TriMas is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Myers Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Myers Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with TriMas and Myers Industries

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

The idea behind TriMas and Myers Industries 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.