Correlation Between Masco and Intelligent Living
Can any of the company-specific risk be diversified away by investing in both Masco and Intelligent Living 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 Masco and Intelligent Living into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Masco and Intelligent Living Application, you can compare the effects of market volatilities on Masco and Intelligent Living 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 Masco with a short position of Intelligent Living. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masco and Intelligent Living.
Diversification Opportunities for Masco and Intelligent Living
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Masco and Intelligent is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Masco and Intelligent Living Application in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelligent Living and Masco 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 Masco are associated (or correlated) with Intelligent Living. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelligent Living has no effect on the direction of Masco i.e., Masco and Intelligent Living go up and down completely randomly.
Pair Corralation between Masco and Intelligent Living
Considering the 90-day investment horizon Masco is expected to generate 0.26 times more return on investment than Intelligent Living. However, Masco is 3.86 times less risky than Intelligent Living. It trades about -0.07 of its potential returns per unit of risk. Intelligent Living Application is currently generating about -0.16 per unit of risk. If you would invest 8,017 in Masco on December 2, 2024 and sell it today you would lose (499.00) from holding Masco or give up 6.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Masco vs. Intelligent Living Application
Performance |
Timeline |
Masco |
Intelligent Living |
Masco and Intelligent Living Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Masco and Intelligent Living
The main advantage of trading using opposite Masco and Intelligent Living positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masco position performs unexpectedly, Intelligent Living 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 Intelligent Living will offset losses from the drop in Intelligent Living's long position.Masco vs. Trane Technologies plc | Masco vs. Quanex Building Products | Masco vs. Jeld Wen Holding | Masco vs. Azek Company |
Intelligent Living vs. Azek Company | Intelligent Living vs. Atlas Engineered Products | Intelligent Living vs. Antelope Enterprise Holdings | Intelligent Living vs. Latham Group |
Check out your portfolio center.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.
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