Correlation Between Armstrong Flooring and Masonite International
Can any of the company-specific risk be diversified away by investing in both Armstrong Flooring and Masonite International 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 Masonite International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armstrong Flooring and Masonite International Corp, you can compare the effects of market volatilities on Armstrong Flooring and Masonite International 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 Masonite International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armstrong Flooring and Masonite International.
Diversification Opportunities for Armstrong Flooring and Masonite International
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Armstrong and Masonite is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Armstrong Flooring and Masonite International Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masonite International 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 Masonite International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masonite International has no effect on the direction of Armstrong Flooring i.e., Armstrong Flooring and Masonite International go up and down completely randomly.
Pair Corralation between Armstrong Flooring and Masonite International
If you would invest 13,126 in Masonite International Corp on January 26, 2024 and sell it today you would earn a total of 34.00 from holding Masonite International Corp or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Armstrong Flooring vs. Masonite International Corp
Performance |
| Timeline |
| Armstrong Flooring |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Masonite International |
Armstrong Flooring and Masonite International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armstrong Flooring and Masonite International
The main advantage of trading using opposite Armstrong Flooring and Masonite International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armstrong Flooring position performs unexpectedly, Masonite International 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 Masonite International will offset losses from the drop in Masonite International's long position.| Armstrong Flooring vs. Townsquare Media | Armstrong Flooring vs. National CineMedia | Armstrong Flooring vs. Tyson Foods | Armstrong Flooring vs. ZhongAn Online P |
| Masonite International vs. Gibraltar Industries | Masonite International vs. Quanex Building Products | Masonite International vs. Perma Pipe International Holdings | Masonite International vs. Interface |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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