Correlation Between Mistras and Forrester Research

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

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

Diversification Opportunities for Mistras and Forrester Research

0.69

Correlation Coefficient

Mistras  Forrester Research

Poor diversification

The 3 months correlation between Mistras and Forrester is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Mistras Group and Forrester Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forrester Research and Mistras 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 Mistras Group are associated (or correlated) with Forrester Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forrester Research has no effect on the direction of Mistras i.e., Mistras and Forrester Research go up and down completely randomly.

Pair Corralation between Mistras and Forrester Research

Allowing for the 90-day total investment horizon Mistras Group is expected to generate 1.22 times more return on investment than Forrester Research. However, Mistras is 1.22 times more volatile than Forrester Research. It trades about 0.09 of its potential returns per unit of risk. Forrester Research is currently generating about -0.05 per unit of risk. If you would invest  391.00  in Mistras Group on June 23, 2024 and sell it today you would earn a total of  737.00  from holding Mistras Group or generate 188.49% return on investment over 90 days.

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

Mistras Group  vs.  Forrester Research

Mistras Group

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mistras Group are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Mistras reported solid returns over the last few months and may actually be approaching a breakup point.

Forrester Research

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Forrester Research are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Forrester Research is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Mistras and Forrester Research

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

The idea behind Mistras Group and Forrester Research 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.