Correlation Between Intelligent Living and Quanex Building
Can any of the company-specific risk be diversified away by investing in both Intelligent Living 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 Intelligent Living and Quanex Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intelligent Living Application and Quanex Building Products, you can compare the effects of market volatilities on Intelligent Living 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 Intelligent Living with a short position of Quanex Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intelligent Living and Quanex Building.
Diversification Opportunities for Intelligent Living and Quanex Building
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intelligent and Quanex is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Intelligent Living Application 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 Intelligent Living 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 Intelligent Living Application 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 Intelligent Living i.e., Intelligent Living and Quanex Building go up and down completely randomly.
Pair Corralation between Intelligent Living and Quanex Building
Given the investment horizon of 90 days Intelligent Living Application is expected to generate 5.0 times more return on investment than Quanex Building. However, Intelligent Living is 5.0 times more volatile than Quanex Building Products. It trades about 0.14 of its potential returns per unit of risk. Quanex Building Products is currently generating about -0.05 per unit of risk. If you would invest 43.00 in Intelligent Living Application on February 16, 2024 and sell it today you would earn a total of 9.00 from holding Intelligent Living Application or generate 20.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Intelligent Living Application vs. Quanex Building Products
Performance |
Timeline |
Intelligent Living |
Quanex Building Products |
Intelligent Living and Quanex Building Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Intelligent Living and Quanex Building
The main advantage of trading using opposite Intelligent Living and Quanex Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intelligent Living 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.Intelligent Living vs. View Inc | Intelligent Living vs. Azek Company | Intelligent Living vs. Atlas Engineered Products | Intelligent Living vs. Antelope Enterprise Holdings |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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