Correlation Between Armstrong Flooring and Latham
Can any of the company-specific risk be diversified away by investing in both Armstrong Flooring and Latham 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 Latham into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armstrong Flooring and Latham Group, you can compare the effects of market volatilities on Armstrong Flooring and Latham 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 Latham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armstrong Flooring and Latham.
Diversification Opportunities for Armstrong Flooring and Latham
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Armstrong and Latham is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Armstrong Flooring and Latham Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latham Group 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 Latham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latham Group has no effect on the direction of Armstrong Flooring i.e., Armstrong Flooring and Latham go up and down completely randomly.
Pair Corralation between Armstrong Flooring and Latham
Assuming the 90 days horizon Armstrong Flooring is expected to generate 75.29 times more return on investment than Latham. However, Armstrong Flooring is 75.29 times more volatile than Latham Group. It trades about 0.39 of its potential returns per unit of risk. Latham Group is currently generating about 0.04 per unit of risk. If you would invest 1.00 in Armstrong Flooring on October 25, 2024 and sell it today you would earn a total of 0.00 from holding Armstrong Flooring or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.01% |
| Values | Daily Returns |
Armstrong Flooring vs. Latham Group
Performance |
| Timeline |
| Armstrong Flooring |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Latham Group |
Armstrong Flooring and Latham Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armstrong Flooring and Latham
The main advantage of trading using opposite Armstrong Flooring and Latham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armstrong Flooring position performs unexpectedly, Latham 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 Latham will offset losses from the drop in Latham's long position.| Armstrong Flooring vs. Travis Perkins PLC | Armstrong Flooring vs. Armstrong World Industries | Armstrong Flooring vs. Apogee Enterprises | Armstrong Flooring vs. Quanex Building Products |
| Latham vs. Janus International Group | Latham vs. Quanex Building Products | Latham vs. GMS Inc | Latham vs. Gibraltar 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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