Correlation Between Armstrong Flooring and Armstrong World
Can any of the company-specific risk be diversified away by investing in both Armstrong Flooring and Armstrong World 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 Armstrong Flooring and Armstrong World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armstrong Flooring and Armstrong World Industries, you can compare the effects of market volatilities on Armstrong Flooring and Armstrong World 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 Armstrong Flooring with a short position of Armstrong World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armstrong Flooring and Armstrong World.
Diversification Opportunities for Armstrong Flooring and Armstrong World
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Armstrong and Armstrong is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Armstrong Flooring and Armstrong World Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armstrong World Indu and Armstrong Flooring 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 Armstrong Flooring are associated (or correlated) with Armstrong World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armstrong World Indu has no effect on the direction of Armstrong Flooring i.e., Armstrong Flooring and Armstrong World go up and down completely randomly.
Pair Corralation between Armstrong Flooring and Armstrong World
If you would invest 7,448 in Armstrong World Industries on January 17, 2024 and sell it today you would earn a total of 4,202 from holding Armstrong World Industries or generate 56.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.54% |
| Values | Daily Returns |
Armstrong Flooring vs. Armstrong World Industries
Performance |
| Timeline |
| Armstrong Flooring |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Armstrong World Indu |
Armstrong Flooring and Armstrong World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armstrong Flooring and Armstrong World
The main advantage of trading using opposite Armstrong Flooring and Armstrong World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armstrong Flooring position performs unexpectedly, Armstrong World 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 Armstrong World will offset losses from the drop in Armstrong World's long position.| Armstrong Flooring vs. DataDot Technology Limited | Armstrong Flooring vs. Adient PLC | Armstrong Flooring vs. FDG Electric Vehicles | Armstrong Flooring vs. Agiliti |
| Armstrong World vs. Carpenter Technology | Armstrong World vs. Myers Industries | Armstrong World vs. Griffon |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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