Correlation Between Comfort Systems and MasTec
Can any of the company-specific risk be diversified away by investing in both Comfort Systems 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 Comfort Systems and MasTec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comfort Systems USA and MasTec Inc, you can compare the effects of market volatilities on Comfort Systems 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 Comfort Systems with a short position of MasTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comfort Systems and MasTec.
Diversification Opportunities for Comfort Systems and MasTec
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Comfort and MasTec is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Comfort Systems USA and MasTec Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MasTec Inc and Comfort Systems 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 Comfort Systems USA 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 Comfort Systems i.e., Comfort Systems and MasTec go up and down completely randomly.
Pair Corralation between Comfort Systems and MasTec
Considering the 90-day investment horizon Comfort Systems USA is expected to under-perform the MasTec. In addition to that, Comfort Systems is 1.42 times more volatile than MasTec Inc. It trades about -0.14 of its total potential returns per unit of risk. MasTec Inc is currently generating about -0.11 per unit of volatility. If you would invest 15,500 in MasTec Inc on November 18, 2024 and sell it today you would lose (1,922) from holding MasTec Inc or give up 12.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comfort Systems USA vs. MasTec Inc
Performance |
| Timeline |
| Comfort Systems USA |
| MasTec Inc |
Comfort Systems and MasTec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comfort Systems and MasTec
The main advantage of trading using opposite Comfort Systems and MasTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comfort Systems 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.| Comfort Systems vs. MYR Group | Comfort Systems vs. Granite Construction Incorporated | Comfort Systems vs. Dycom Industries | Comfort Systems vs. MasTec Inc |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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