Correlation Between Alpha Pro and Owens Corning
Can any of the company-specific risk be diversified away by investing in both Alpha Pro 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 Alpha Pro and Owens Corning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Pro Tech and Owens Corning, you can compare the effects of market volatilities on Alpha Pro 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 Alpha Pro with a short position of Owens Corning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Pro and Owens Corning.
Diversification Opportunities for Alpha Pro and Owens Corning
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alpha and Owens is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Pro Tech and Owens Corning in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Owens Corning and Alpha Pro 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 Alpha Pro Tech 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 Alpha Pro i.e., Alpha Pro and Owens Corning go up and down completely randomly.
Pair Corralation between Alpha Pro and Owens Corning
Considering the 90-day investment horizon Alpha Pro Tech is expected to under-perform the Owens Corning. In addition to that, Alpha Pro is 1.12 times more volatile than Owens Corning. It trades about -0.13 of its total potential returns per unit of risk. Owens Corning is currently generating about 0.36 per unit of volatility. If you would invest 18,096 in Owens Corning on August 30, 2024 and sell it today you would earn a total of 2,414 from holding Owens Corning or generate 13.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Alpha Pro Tech vs. Owens Corning
Performance |
| Timeline |
| Alpha Pro Tech |
| Owens Corning |
Alpha Pro and Owens Corning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Pro and Owens Corning
The main advantage of trading using opposite Alpha Pro and Owens Corning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Pro 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.| Alpha Pro vs. Trex Company | Alpha Pro vs. Quanex Building Products | Alpha Pro vs. Armstrong World Industries | Alpha Pro vs. Gibraltar Industries |
| Owens Corning vs. Trane Technologies plc | Owens Corning vs. Masco | Owens Corning vs. Quanex Building Products | Owens Corning vs. Jeld Wen Holding |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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