Correlation Between MasterBrand and Tempur Sealy
Can any of the company-specific risk be diversified away by investing in both MasterBrand and Tempur Sealy 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 Tempur Sealy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MasterBrand and Tempur Sealy International, you can compare the effects of market volatilities on MasterBrand and Tempur Sealy 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 Tempur Sealy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MasterBrand and Tempur Sealy.
Diversification Opportunities for MasterBrand and Tempur Sealy
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MasterBrand and Tempur is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding MasterBrand and Tempur Sealy International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempur Sealy Interna 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 Tempur Sealy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempur Sealy Interna has no effect on the direction of MasterBrand i.e., MasterBrand and Tempur Sealy go up and down completely randomly.
Pair Corralation between MasterBrand and Tempur Sealy
Considering the 90-day investment horizon MasterBrand is expected to generate 1.79 times less return on investment than Tempur Sealy. In addition to that, MasterBrand is 1.18 times more volatile than Tempur Sealy International. It trades about 0.06 of its total potential returns per unit of risk. Tempur Sealy International is currently generating about 0.13 per unit of volatility. If you would invest 5,128 in Tempur Sealy International on November 2, 2024 and sell it today you would earn a total of 1,309 from holding Tempur Sealy International or generate 25.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MasterBrand vs. Tempur Sealy International
Performance |
| Timeline |
| MasterBrand |
| Tempur Sealy Interna |
MasterBrand and Tempur Sealy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MasterBrand and Tempur Sealy
The main advantage of trading using opposite MasterBrand and Tempur Sealy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MasterBrand position performs unexpectedly, Tempur Sealy 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 Tempur Sealy will offset losses from the drop in Tempur Sealy's long position.| MasterBrand vs. Bassett Furniture Industries | MasterBrand vs. Ethan Allen Interiors | MasterBrand vs. Natuzzi SpA | MasterBrand vs. Flexsteel Industries |
| Tempur Sealy vs. La Z Boy Incorporated | Tempur Sealy vs. Purple Innovation | Tempur Sealy vs. MasterBrand | Tempur Sealy vs. Ethan Allen Interiors |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |