Correlation Between Masco and Antelope Enterprise

Can any of the company-specific risk be diversified away by investing in both Masco and Antelope Enterprise 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 Masco and Antelope Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Masco and Antelope Enterprise Holdings, you can compare the effects of market volatilities on Masco and Antelope Enterprise 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 Masco with a short position of Antelope Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masco and Antelope Enterprise.

Diversification Opportunities for Masco and Antelope Enterprise

-0.12

Correlation Coefficient

Masco  Antelope Enterprise

Good diversification

The 3 months correlation between Masco and Antelope is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Masco and Antelope Enterprise Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antelope Enterprise and Masco 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 Masco are associated (or correlated) with Antelope Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antelope Enterprise has no effect on the direction of Masco i.e., Masco and Antelope Enterprise go up and down completely randomly.

Pair Corralation between Masco and Antelope Enterprise

Considering the 90-day investment horizon Masco is expected to under-perform the Antelope Enterprise. But the stock apears to be less risky and, when comparing its historical volatility, Masco is 3.6 times less risky than Antelope Enterprise. The stock trades about -0.11 of its potential returns per unit of risk. The Antelope Enterprise Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  151.00  in Antelope Enterprise Holdings on March 13, 2024 and sell it today you would earn a total of  21.00  from holding Antelope Enterprise Holdings or generate 13.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Masco  vs.  Antelope Enterprise Holdings

Masco

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Masco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Antelope Enterprise

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Antelope Enterprise Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal technical indicators, Antelope Enterprise disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Masco and Antelope Enterprise

The main advantage of trading using opposite Masco and Antelope Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masco position performs unexpectedly, Antelope Enterprise 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 Antelope Enterprise will offset losses from the drop in Antelope Enterprise's long position.

The idea behind Masco and Antelope Enterprise Holdings 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.