Correlation Between Wang Lee and MasTec
Can any of the company-specific risk be diversified away by investing in both Wang Lee and MasTec 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 Wang Lee and MasTec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wang Lee Group, and MasTec Inc, you can compare the effects of market volatilities on Wang Lee and MasTec 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 Wang Lee with a short position of MasTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wang Lee and MasTec.
Diversification Opportunities for Wang Lee and MasTec
Very poor diversification
The 3 months correlation between Wang and MasTec is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Wang Lee Group, and MasTec Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MasTec Inc and Wang Lee 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 Wang Lee Group, are associated (or correlated) with MasTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MasTec Inc has no effect on the direction of Wang Lee i.e., Wang Lee and MasTec go up and down completely randomly.
Pair Corralation between Wang Lee and MasTec
Given the investment horizon of 90 days Wang Lee Group, is expected to generate 5.31 times more return on investment than MasTec. However, Wang Lee is 5.31 times more volatile than MasTec Inc. It trades about 0.24 of its potential returns per unit of risk. MasTec Inc is currently generating about 0.26 per unit of risk. If you would invest 240.00 in Wang Lee Group, on August 23, 2024 and sell it today you would earn a total of 152.00 from holding Wang Lee Group, or generate 63.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wang Lee Group, vs. MasTec Inc
Performance |
| Timeline |
| Wang Lee Group, |
| MasTec Inc |
Wang Lee and MasTec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wang Lee and MasTec
The main advantage of trading using opposite Wang Lee and MasTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wang Lee position performs unexpectedly, MasTec 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 MasTec will offset losses from the drop in MasTec's long position.| Wang Lee vs. PepsiCo | Wang Lee vs. National Beverage Corp | Wang Lee vs. Willamette Valley Vineyards | Wang Lee vs. Celsius Holdings |
| MasTec vs. EMCOR Group | MasTec vs. Comfort Systems USA | MasTec vs. Primoris Services | MasTec vs. Granite Construction Incorporated |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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