Correlation Between MYR and Capital Senior

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

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

Diversification Opportunities for MYR and Capital Senior

0.0

Correlation Coefficient

MYR  Capital Senior

Pay attention - limited upside

The 3 months correlation between MYR and Capital is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MYR Group and Capital Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Senior Living 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 Capital Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Senior Living has no effect on the direction of MYR i.e., MYR and Capital Senior go up and down completely randomly.

Pair Corralation between MYR and Capital Senior

If you would invest (100.00) in Capital Senior Living on February 3, 2024 and sell it today you would earn a total of  100.00  from holding Capital Senior Living or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

MYR Group  vs.  Capital Senior Living

MYR Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MYR Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, MYR is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Capital Senior Living

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with MYR and Capital Senior

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

The idea behind MYR Group and Capital Senior Living 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.

Check out your portfolio center.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.