Correlation Between Deltex Medical and Masco Corp
Can any of the company-specific risk be diversified away by investing in both Deltex Medical and Masco Corp 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 Deltex Medical and Masco Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deltex Medical Group and Masco Corp, you can compare the effects of market volatilities on Deltex Medical and Masco Corp 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 Deltex Medical with a short position of Masco Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deltex Medical and Masco Corp.
Diversification Opportunities for Deltex Medical and Masco Corp
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Deltex and Masco is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Deltex Medical Group and Masco Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masco Corp and Deltex Medical 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 Deltex Medical Group are associated (or correlated) with Masco Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masco Corp has no effect on the direction of Deltex Medical i.e., Deltex Medical and Masco Corp go up and down completely randomly.
Pair Corralation between Deltex Medical and Masco Corp
Assuming the 90 days trading horizon Deltex Medical Group is expected to under-perform the Masco Corp. In addition to that, Deltex Medical is 2.47 times more volatile than Masco Corp. It trades about -0.04 of its total potential returns per unit of risk. Masco Corp is currently generating about 0.08 per unit of volatility. If you would invest 5,914 in Masco Corp on September 14, 2024 and sell it today you would earn a total of 1,984 from holding Masco Corp or generate 33.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.52% |
| Values | Daily Returns |
Deltex Medical Group vs. Masco Corp
Performance |
| Timeline |
| Deltex Medical Group |
| Masco Corp |
Deltex Medical and Masco Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deltex Medical and Masco Corp
The main advantage of trading using opposite Deltex Medical and Masco Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deltex Medical position performs unexpectedly, Masco Corp 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 Masco Corp will offset losses from the drop in Masco Corp's long position.| Deltex Medical vs. Gaztransport et Technigaz | Deltex Medical vs. Naked Wines plc | Deltex Medical vs. Panther Metals PLC | Deltex Medical vs. Take Two Interactive Software |
| Masco Corp vs. Deltex Medical Group | Masco Corp vs. Empire Metals Limited | Masco Corp vs. Odfjell Drilling | Masco Corp vs. Golden Metal Resources |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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