Correlation Between Matrix Service and Ameresco

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

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

Diversification Opportunities for Matrix Service and Ameresco

-0.53

Correlation Coefficient

Matrix Service  Ameresco

Excellent diversification

The 3 months correlation between Matrix and Ameresco is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Matrix Service Co and Ameresco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameresco and Matrix Service 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 Matrix Service Co are associated (or correlated) with Ameresco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameresco has no effect on the direction of Matrix Service i.e., Matrix Service and Ameresco go up and down completely randomly.

Pair Corralation between Matrix Service and Ameresco

Given the investment horizon of 90 days Matrix Service Co is expected to under-perform the Ameresco. But the stock apears to be less risky and, when comparing its historical volatility, Matrix Service Co is 1.94 times less risky than Ameresco. The stock trades about -0.11 of its potential returns per unit of risk. The Ameresco is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2,018  in Ameresco on March 14, 2024 and sell it today you would earn a total of  1,537  from holding Ameresco or generate 76.16% return on investment over 90 days.

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

Matrix Service Co  vs.  Ameresco

Matrix Service

Risk-Adjusted Performance

0 of 100

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 fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Ameresco

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ameresco are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Ameresco exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Matrix Service and Ameresco

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

The idea behind Matrix Service Co and Ameresco 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.