Correlation Between Armstrong Flooring and CRH PLC
Can any of the company-specific risk be diversified away by investing in both Armstrong Flooring and CRH PLC 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 CRH PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armstrong Flooring and CRH PLC ADR, you can compare the effects of market volatilities on Armstrong Flooring and CRH PLC 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 CRH PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armstrong Flooring and CRH PLC.
Diversification Opportunities for Armstrong Flooring and CRH PLC
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Armstrong and CRH is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Armstrong Flooring and CRH PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRH PLC ADR 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 CRH PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRH PLC ADR has no effect on the direction of Armstrong Flooring i.e., Armstrong Flooring and CRH PLC go up and down completely randomly.
Pair Corralation between Armstrong Flooring and CRH PLC
If you would invest 4,833 in CRH PLC ADR on January 20, 2024 and sell it today you would earn a total of 2,881 from holding CRH PLC ADR or generate 59.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Armstrong Flooring vs. CRH PLC ADR
Performance |
| Timeline |
| Armstrong Flooring |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CRH PLC ADR |
Armstrong Flooring and CRH PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armstrong Flooring and CRH PLC
The main advantage of trading using opposite Armstrong Flooring and CRH PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armstrong Flooring position performs unexpectedly, CRH PLC 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 CRH PLC will offset losses from the drop in CRH PLC's long position.| Armstrong Flooring vs. Molson Coors Brewing | Armstrong Flooring vs. Philip Morris International | Armstrong Flooring vs. Scandinavian Tobacco Group | Armstrong Flooring vs. Tandy Leather Factory |
| CRH PLC vs. Martin Marietta Materials | CRH PLC vs. Eagle Materials | CRH PLC vs. Summit Materials | CRH PLC vs. United States Lime |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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