Correlation Between MasTec and Comfort Systems
Can any of the company-specific risk be diversified away by investing in both MasTec and Comfort Systems 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 MasTec and Comfort Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MasTec Inc and Comfort Systems USA, you can compare the effects of market volatilities on MasTec and Comfort Systems 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 MasTec with a short position of Comfort Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of MasTec and Comfort Systems.
Diversification Opportunities for MasTec and Comfort Systems
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MasTec and Comfort is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding MasTec Inc and Comfort Systems USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comfort Systems USA and MasTec 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 MasTec Inc are associated (or correlated) with Comfort Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comfort Systems USA has no effect on the direction of MasTec i.e., MasTec and Comfort Systems go up and down completely randomly.
Pair Corralation between MasTec and Comfort Systems
Considering the 90-day investment horizon MasTec is expected to generate 2.48 times less return on investment than Comfort Systems. In addition to that, MasTec is 1.04 times more volatile than Comfort Systems USA. It trades about 0.05 of its total potential returns per unit of risk. Comfort Systems USA is currently generating about 0.13 per unit of volatility. If you would invest 11,707 in Comfort Systems USA on October 20, 2024 and sell it today you would earn a total of 38,671 from holding Comfort Systems USA or generate 330.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MasTec Inc vs. Comfort Systems USA
Performance |
| Timeline |
| MasTec Inc |
| Comfort Systems USA |
MasTec and Comfort Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MasTec and Comfort Systems
The main advantage of trading using opposite MasTec and Comfort Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MasTec position performs unexpectedly, Comfort Systems 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 Comfort Systems will offset losses from the drop in Comfort Systems' long position.| MasTec vs. EMCOR Group | MasTec vs. Comfort Systems USA | MasTec vs. Primoris Services | MasTec vs. Granite Construction Incorporated |
| Comfort Systems vs. MYR Group | Comfort Systems vs. Granite Construction Incorporated | Comfort Systems vs. Dycom Industries | Comfort Systems vs. MasTec Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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