Correlation Between Argan and MasTec
Can any of the company-specific risk be diversified away by investing in both Argan 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 Argan and MasTec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argan Inc and MasTec Inc, you can compare the effects of market volatilities on Argan 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 Argan with a short position of MasTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argan and MasTec.
Diversification Opportunities for Argan and MasTec
Good diversification
The 24 months correlation between Argan and MasTec is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Argan Inc and MasTec Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MasTec Inc and Argan 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 Argan Inc 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 Argan i.e., Argan and MasTec go up and down completely randomly.
Pair Corralation between Argan and MasTec
Considering the 90-day investment horizon Argan Inc is expected to generate 2.0 times more return on investment than MasTec. However, Argan is 2.0 times more volatile than MasTec Inc. It trades about 0.21 of its potential returns per unit of risk. MasTec Inc is currently generating about -0.08 per unit of risk. If you would invest 5,025 in Argan Inc on January 20, 2024 and sell it today you would earn a total of 1,074 from holding Argan Inc or generate 21.37% return on investment over 90 days.
| Time Period | 24 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Argan Inc vs. MasTec Inc
Performance |
| Timeline |
| Argan Inc |
| MasTec Inc |
Argan and MasTec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argan and MasTec
The main advantage of trading using opposite Argan and MasTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argan 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.The idea behind Argan Inc and MasTec Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |