Correlation Between American Woodmark and Traeger
Can any of the company-specific risk be diversified away by investing in both American Woodmark and Traeger 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 American Woodmark and Traeger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Woodmark and Traeger, you can compare the effects of market volatilities on American Woodmark and Traeger 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 American Woodmark with a short position of Traeger. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Woodmark and Traeger.
Diversification Opportunities for American Woodmark and Traeger
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Traeger is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding American Woodmark and Traeger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Traeger and American Woodmark 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 American Woodmark are associated (or correlated) with Traeger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Traeger has no effect on the direction of American Woodmark i.e., American Woodmark and Traeger go up and down completely randomly.
Pair Corralation between American Woodmark and Traeger
Given the investment horizon of 90 days American Woodmark is expected to generate 0.58 times more return on investment than Traeger. However, American Woodmark is 1.71 times less risky than Traeger. It trades about -0.2 of its potential returns per unit of risk. Traeger is currently generating about -0.31 per unit of risk. If you would invest 9,800 in American Woodmark on January 20, 2024 and sell it today you would lose (790.00) from holding American Woodmark or give up 8.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
American Woodmark vs. Traeger
Performance |
Timeline |
American Woodmark |
Traeger |
American Woodmark and Traeger Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Woodmark and Traeger
The main advantage of trading using opposite American Woodmark and Traeger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Woodmark position performs unexpectedly, Traeger 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 Traeger will offset losses from the drop in Traeger's long position.American Woodmark vs. La Z Boy Incorporated | American Woodmark vs. Natuzzi SpA | American Woodmark vs. Mohawk Industries | American Woodmark vs. MasterBrand |
Traeger vs. Bassett Furniture Industries | Traeger vs. Ethan Allen Interiors | Traeger vs. Natuzzi SpA | Traeger vs. Flexsteel Industries |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |