Correlation Between Ameresco and MYR

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

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

Diversification Opportunities for Ameresco and MYR

-0.12

Correlation Coefficient

Ameresco  MYR

Good diversification

The 3 months correlation between Ameresco and MYR is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ameresco and MYR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYR Group and Ameresco 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 Ameresco 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 Ameresco i.e., Ameresco and MYR go up and down completely randomly.

Pair Corralation between Ameresco and MYR

Given the investment horizon of 90 days Ameresco is expected to generate 1.92 times more return on investment than MYR. However, Ameresco is 1.92 times more volatile than MYR Group. It trades about 0.29 of its potential returns per unit of risk. MYR Group is currently generating about -0.11 per unit of risk. If you would invest  1,944  in Ameresco on February 16, 2024 and sell it today you would earn a total of  790.00  from holding Ameresco or generate 40.64% return on investment over 90 days.

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

Ameresco  vs.  MYR Group

Ameresco

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ameresco are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Ameresco exhibited solid returns over the last few months and may actually be approaching a breakup point.

MYR Group

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days MYR Group has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Ameresco and MYR

The main advantage of trading using opposite Ameresco and MYR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameresco 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 Ameresco 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.