Correlation Between MasTec and Founder Group

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

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

Diversification Opportunities for MasTec and Founder Group

-0.45

Correlation Coefficient

MasTec  Founder Group

Very good diversification

The 3 months correlation between MasTec and Founder is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding MasTec Inc and Founder Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Founder Group Limited and MasTec 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 MasTec Inc are associated (or correlated) with Founder Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Founder Group Limited has no effect on the direction of MasTec i.e., MasTec and Founder Group go up and down completely randomly.

Pair Corralation between MasTec and Founder Group

Considering the 90-day investment horizon MasTec Inc is expected to generate 0.17 times more return on investment than Founder Group. However, MasTec Inc is 5.81 times less risky than Founder Group. It trades about 0.26 of its potential returns per unit of risk. Founder Group Limited is currently generating about 0.02 per unit of risk. If you would invest  10,436  in MasTec Inc on September 3, 2024 and sell it today you would earn a total of  3,970  from holding MasTec Inc or generate 38.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	43.75%
Values	Daily Returns

MasTec Inc  vs.  Founder Group Limited

MasTec Inc

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MasTec Inc are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, MasTec showed solid returns over the last few months and may actually be approaching a breakup point.

Founder Group Limited

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Founder Group Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite sluggish technical and fundamental indicators, Founder Group disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MasTec and Founder Group

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

The idea behind MasTec Inc and Founder Group Limited 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.