Correlation Between Energy Services and MasTec
Can any of the company-specific risk be diversified away by investing in both Energy Services and MasTec 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 Energy Services and MasTec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Services and MasTec Inc, you can compare the effects of market volatilities on Energy Services and MasTec 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 Energy Services with a short position of MasTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Services and MasTec.
Diversification Opportunities for Energy Services and MasTec
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Energy and MasTec is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Energy Services and MasTec Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MasTec Inc and Energy Services 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 Energy Services are associated (or correlated) with MasTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MasTec Inc has no effect on the direction of Energy Services i.e., Energy Services and MasTec go up and down completely randomly.
Pair Corralation between Energy Services and MasTec
Given the investment horizon of 90 days Energy Services is expected to under-perform the MasTec. In addition to that, Energy Services is 1.76 times more volatile than MasTec Inc. It trades about -0.08 of its total potential returns per unit of risk. MasTec Inc is currently generating about 0.01 per unit of volatility. If you would invest 13,848 in MasTec Inc on November 18, 2024 and sell it today you would lose (270.00) from holding MasTec Inc or give up 1.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Services vs. MasTec Inc
Performance |
| Timeline |
| Energy Services |
| MasTec Inc |
Energy Services and MasTec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Services and MasTec
The main advantage of trading using opposite Energy Services and MasTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Services position performs unexpectedly, MasTec 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 MasTec will offset losses from the drop in MasTec's long position.| Energy Services vs. Bouygues SA | Energy Services vs. NV5 Global | Energy Services vs. Matrix Service Co | Energy Services vs. MYR Group |
| MasTec vs. EMCOR Group | MasTec vs. Comfort Systems USA | MasTec vs. Primoris Services | MasTec vs. Granite Construction Incorporated |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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