Correlation Between Mast Global and Utilities Select

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

By analyzing existing cross correlation between Mast Global Battery and Utilities Select Sector, you can compare the effects of market volatilities on Mast Global and Utilities Select 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 Mast Global with a short position of Utilities Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mast Global and Utilities Select.

Diversification Opportunities for Mast Global and Utilities Select

0.02

Correlation Coefficient

Mast Global  Utilities Select

Significant diversification

The 3 months correlation between Mast and Utilities is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Mast Global Battery and Utilities Select Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utilities Select Sector and Mast Global 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 Mast Global Battery are associated (or correlated) with Utilities Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utilities Select Sector has no effect on the direction of Mast Global i.e., Mast Global and Utilities Select go up and down completely randomly.

Pair Corralation between Mast Global and Utilities Select

Allowing for the 90-day total investment horizon Mast Global is expected to generate 22.42 times less return on investment than Utilities Select. In addition to that, Mast Global is 1.01 times more volatile than Utilities Select Sector. It trades about 0.01 of its total potential returns per unit of risk. Utilities Select Sector is currently generating about 0.3 per unit of volatility. If you would invest  7,461  in Utilities Select Sector on October 20, 2024 and sell it today you would earn a total of  423.00  from holding Utilities Select Sector or generate 5.67% return on investment over 90 days.

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

Mast Global Battery  vs.  Utilities Select Sector

Mast Global Battery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mast Global Battery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

Utilities Select Sector

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Mast Global and Utilities Select

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

The idea behind Mast Global Battery and Utilities Select Sector 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.