Correlation Between AgrifyCorp and MasTec

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

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

Diversification Opportunities for AgrifyCorp and MasTec

-0.84

Correlation Coefficient

AgrifyCorp  MasTec

Pay attention - limited upside

The 3 months correlation between AgrifyCorp and MasTec is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding AgrifyCorp and MasTec Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MasTec Inc and AgrifyCorp 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 AgrifyCorp 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 AgrifyCorp i.e., AgrifyCorp and MasTec go up and down completely randomly.

Pair Corralation between AgrifyCorp and MasTec

Given the investment horizon of 90 days AgrifyCorp is expected to under-perform the MasTec. In addition to that, AgrifyCorp is 2.7 times more volatile than MasTec Inc. It trades about -0.13 of its total potential returns per unit of risk. MasTec Inc is currently generating about 0.21 per unit of volatility. If you would invest  5,000  in MasTec Inc on February 6, 2024 and sell it today you would earn a total of  5,180  from holding MasTec Inc or generate 103.6% return on investment over 90 days.

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

AgrifyCorp  vs.  MasTec Inc

AgrifyCorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AgrifyCorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

MasTec Inc

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MasTec Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, MasTec showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AgrifyCorp and MasTec

The main advantage of trading using opposite AgrifyCorp and MasTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AgrifyCorp 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 AgrifyCorp 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.