Correlation Between MasterBrand and Applied UV
Can any of the company-specific risk be diversified away by investing in both MasterBrand and Applied UV 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 Applied UV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MasterBrand and Applied UV, you can compare the effects of market volatilities on MasterBrand and Applied UV 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 Applied UV. Check out your portfolio center. Please also check ongoing floating volatility patterns of MasterBrand and Applied UV.
Diversification Opportunities for MasterBrand and Applied UV
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MasterBrand and Applied is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding MasterBrand and Applied UV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied UV 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 Applied UV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied UV has no effect on the direction of MasterBrand i.e., MasterBrand and Applied UV go up and down completely randomly.
Pair Corralation between MasterBrand and Applied UV
Considering the 90-day investment horizon MasterBrand is expected to generate 0.23 times more return on investment than Applied UV. However, MasterBrand is 4.29 times less risky than Applied UV. It trades about 0.06 of its potential returns per unit of risk. Applied UV is currently generating about -0.17 per unit of risk. If you would invest 817.00 in MasterBrand on October 9, 2024 and sell it today you would earn a total of 665.00 from holding MasterBrand or generate 81.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.98% |
| Values | Daily Returns |
MasterBrand vs. Applied UV
Performance |
| Timeline |
| MasterBrand |
| Applied UV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MasterBrand and Applied UV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MasterBrand and Applied UV
The main advantage of trading using opposite MasterBrand and Applied UV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MasterBrand position performs unexpectedly, Applied UV 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 Applied UV will offset losses from the drop in Applied UV's long position.| MasterBrand vs. Bassett Furniture Industries | MasterBrand vs. Ethan Allen Interiors | MasterBrand vs. Natuzzi SpA | MasterBrand vs. Flexsteel Industries |
| Applied UV vs. FGI Industries | Applied UV vs. Aterian | Applied UV vs. Energy Focu | Applied UV vs. MasterBrand |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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