Correlation Between Interface and Masco
Can any of the company-specific risk be diversified away by investing in both Interface 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 Interface and Masco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interface and Masco, you can compare the effects of market volatilities on Interface 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 Interface with a short position of Masco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interface and Masco.
Diversification Opportunities for Interface and Masco
Very weak diversification
The 3 months correlation between Interface and Masco is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Interface and Masco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masco and Interface 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 Interface 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 Interface i.e., Interface and Masco go up and down completely randomly.
Pair Corralation between Interface and Masco
Given the investment horizon of 90 days Interface is expected to under-perform the Masco. In addition to that, Interface is 2.34 times more volatile than Masco. It trades about -0.29 of its total potential returns per unit of risk. Masco is currently generating about -0.17 per unit of volatility. If you would invest 8,007 in Masco on November 29, 2024 and sell it today you would lose (404.00) from holding Masco or give up 5.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Interface vs. Masco
Performance |
Timeline |
Interface |
Masco |
Interface and Masco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Interface and Masco
The main advantage of trading using opposite Interface and Masco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interface 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.Interface vs. Quanex Building Products | ||
Interface vs. Janus International Group | ||
Interface vs. Apogee Enterprises | ||
Interface vs. Gibraltar Industries |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
CEOs Directory Screen CEOs from public companies around the world | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |