Correlation Between PGT Innovations and Masco
Can any of the company-specific risk be diversified away by investing in both PGT Innovations and Masco 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 PGT Innovations and Masco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PGT Innovations and Masco, you can compare the effects of market volatilities on PGT Innovations and Masco 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 PGT Innovations with a short position of Masco. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGT Innovations and Masco.
Diversification Opportunities for PGT Innovations and Masco
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PGT and Masco is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding PGT Innovations and Masco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masco and PGT Innovations 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 PGT Innovations are associated (or correlated) with Masco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masco has no effect on the direction of PGT Innovations i.e., PGT Innovations and Masco go up and down completely randomly.
Pair Corralation between PGT Innovations and Masco
Given the investment horizon of 90 days PGT Innovations is expected to generate 1.32 times more return on investment than Masco. However, PGT Innovations is 1.32 times more volatile than Masco. It trades about 0.1 of its potential returns per unit of risk. Masco is currently generating about 0.06 per unit of risk. If you would invest 2,218 in PGT Innovations on August 27, 2024 and sell it today you would earn a total of 577.00 from holding PGT Innovations or generate 26.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 25.71% |
| Values | Daily Returns |
PGT Innovations vs. Masco
Performance |
| Timeline |
| PGT Innovations |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Masco |
PGT Innovations and Masco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PGT Innovations and Masco
The main advantage of trading using opposite PGT Innovations and Masco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGT Innovations position performs unexpectedly, Masco 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 Masco will offset losses from the drop in Masco's long position.| PGT Innovations vs. Quanex Building Products | PGT Innovations vs. Janus International Group | PGT Innovations vs. Interface | PGT Innovations vs. Apogee Enterprises |
| Masco vs. Trane Technologies plc | Masco vs. Quanex Building Products | Masco vs. Jeld Wen Holding | Masco vs. Azek Company |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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