Correlation Between Armstrong Flooring and Owens Corning
Can any of the company-specific risk be diversified away by investing in both Armstrong Flooring and Owens Corning 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 Owens Corning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armstrong Flooring and Owens Corning, you can compare the effects of market volatilities on Armstrong Flooring and Owens Corning 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 Owens Corning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armstrong Flooring and Owens Corning.
Diversification Opportunities for Armstrong Flooring and Owens Corning
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Armstrong and Owens is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Armstrong Flooring and Owens Corning in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Owens Corning 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 Owens Corning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Owens Corning has no effect on the direction of Armstrong Flooring i.e., Armstrong Flooring and Owens Corning go up and down completely randomly.
Pair Corralation between Armstrong Flooring and Owens Corning
If you would invest 16,415 in Owens Corning on January 26, 2024 and sell it today you would earn a total of 89.00 from holding Owens Corning or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Armstrong Flooring vs. Owens Corning
Performance |
| Timeline |
| Armstrong Flooring |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Owens Corning |
Armstrong Flooring and Owens Corning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armstrong Flooring and Owens Corning
The main advantage of trading using opposite Armstrong Flooring and Owens Corning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armstrong Flooring position performs unexpectedly, Owens Corning 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 Owens Corning will offset losses from the drop in Owens Corning's long position.| Armstrong Flooring vs. Hf Foods Group | Armstrong Flooring vs. Natural Alternatives International | Armstrong Flooring vs. National Beverage Corp | Armstrong Flooring vs. Siriuspoint |
| Owens Corning vs. Travis Perkins plc | Owens Corning vs. Travis Perkins PLC | Owens Corning vs. Janus International Group | Owens Corning 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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