Correlation Between MasterBrand and Haier Smart

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

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

Diversification Opportunities for MasterBrand and Haier Smart

0.57

Correlation Coefficient

MasterBrand  Haier Smart

Very weak diversification

The 3 months correlation between MasterBrand and Haier is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding MasterBrand and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home and MasterBrand 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 MasterBrand are associated (or correlated) with Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of MasterBrand i.e., MasterBrand and Haier Smart go up and down completely randomly.

Pair Corralation between MasterBrand and Haier Smart

Considering the 90-day investment horizon MasterBrand is expected to under-perform the Haier Smart. But the stock apears to be less risky and, when comparing its historical volatility, MasterBrand is 2.35 times less risky than Haier Smart. The stock trades about -0.15 of its potential returns per unit of risk. The Haier Smart Home is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  175.00  in Haier Smart Home on December 1, 2024 and sell it today you would lose (16.00) from holding Haier Smart Home or give up 9.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

MasterBrand  vs.  Haier Smart Home

MasterBrand

Risk-Adjusted Performance

Very Weak

Over the last 90 days MasterBrand 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 Stock's fundamental drivers remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Haier Smart Home

Risk-Adjusted Performance

Very Weak

Over the last 90 days Haier Smart Home has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Haier Smart is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MasterBrand and Haier Smart

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

The idea behind MasterBrand and Haier Smart Home 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.