Correlation Between ETRACS Monthly and Mast Global

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

By analyzing existing cross correlation between ETRACS Monthly Pay and Mast Global Battery, you can compare the effects of market volatilities on ETRACS Monthly and Mast Global 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 ETRACS Monthly with a short position of Mast Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETRACS Monthly and Mast Global.

Diversification Opportunities for ETRACS Monthly and Mast Global

0.46

Correlation Coefficient

ETRACS Monthly  Mast Global

Very weak diversification

The 3 months correlation between ETRACS and Mast is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding ETRACS Monthly Pay and Mast Global Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mast Global Battery and ETRACS Monthly 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 ETRACS Monthly Pay are associated (or correlated) with Mast Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mast Global Battery has no effect on the direction of ETRACS Monthly i.e., ETRACS Monthly and Mast Global go up and down completely randomly.

Pair Corralation between ETRACS Monthly and Mast Global

Given the investment horizon of 90 days ETRACS Monthly is expected to generate 1.74 times less return on investment than Mast Global. But when comparing it to its historical volatility, ETRACS Monthly Pay is 1.97 times less risky than Mast Global. It trades about 0.11 of its potential returns per unit of risk. Mast Global Battery is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,334  in Mast Global Battery on September 12, 2024 and sell it today you would earn a total of  237.00  from holding Mast Global Battery or generate 10.15% return on investment over 90 days.

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

ETRACS Monthly Pay  vs.  Mast Global Battery

ETRACS Monthly Pay

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ETRACS Monthly Pay are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, ETRACS Monthly is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Mast Global Battery

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mast Global Battery are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Mast Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ETRACS Monthly and Mast Global

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

The idea behind ETRACS Monthly Pay and Mast Global Battery 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.