Correlation Between Armstrong Flooring and Quanex Building
Can any of the company-specific risk be diversified away by investing in both Armstrong Flooring and Quanex Building 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 Quanex Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armstrong Flooring and Quanex Building Products, you can compare the effects of market volatilities on Armstrong Flooring and Quanex Building 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 Quanex Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armstrong Flooring and Quanex Building.
Diversification Opportunities for Armstrong Flooring and Quanex Building
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Armstrong and Quanex is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Armstrong Flooring and Quanex Building Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanex Building Products 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 Quanex Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quanex Building Products has no effect on the direction of Armstrong Flooring i.e., Armstrong Flooring and Quanex Building go up and down completely randomly.
Pair Corralation between Armstrong Flooring and Quanex Building
If you would invest 35.00 in Armstrong Flooring on January 18, 2024 and sell it today you would earn a total of 0.00 from holding Armstrong Flooring or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Armstrong Flooring vs. Quanex Building Products
Performance |
| Timeline |
| Armstrong Flooring |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Quanex Building Products |
Armstrong Flooring and Quanex Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armstrong Flooring and Quanex Building
The main advantage of trading using opposite Armstrong Flooring and Quanex Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armstrong Flooring position performs unexpectedly, Quanex Building 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 Quanex Building will offset losses from the drop in Quanex Building's long position.| Armstrong Flooring vs. Joint Stock | Armstrong Flooring vs. Datadog | Armstrong Flooring vs. Asure Software | Armstrong Flooring vs. The Wendys Co |
| Quanex Building vs. Carpenter Technology | Quanex Building vs. Myers Industries | Quanex Building 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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