Correlation Between Fluor and Matrix Service

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

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

Diversification Opportunities for Fluor and Matrix Service

0.86

Correlation Coefficient

Fluor  Matrix Service

Very poor diversification

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

Pair Corralation between Fluor and Matrix Service

Considering the 90-day investment horizon Fluor is expected to under-perform the Matrix Service. But the stock apears to be less risky and, when comparing its historical volatility, Fluor is 1.12 times less risky than Matrix Service. The stock trades about -0.11 of its potential returns per unit of risk. The Matrix Service Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,360  in Matrix Service Co on February 3, 2025 and sell it today you would lose (111.00) from holding Matrix Service Co or give up 8.16% of portfolio value over 90 days.

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

Fluor  vs.  Matrix Service Co

Fluor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fluor has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in June 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Matrix Service

Risk-Adjusted Performance

Very Weak

Over the last 90 days Matrix Service Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Matrix Service is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fluor and Matrix Service

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

The idea behind Fluor and Matrix Service Co 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.