Correlation Between Aspen Aerogels and Owens Corning
Can any of the company-specific risk be diversified away by investing in both Aspen Aerogels 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 Aspen Aerogels and Owens Corning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspen Aerogels and Owens Corning, you can compare the effects of market volatilities on Aspen Aerogels 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 Aspen Aerogels with a short position of Owens Corning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Aerogels and Owens Corning.
Diversification Opportunities for Aspen Aerogels and Owens Corning
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aspen and Owens is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Aerogels and Owens Corning in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Owens Corning and Aspen Aerogels 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 Aspen Aerogels 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 Aspen Aerogels i.e., Aspen Aerogels and Owens Corning go up and down completely randomly.
Pair Corralation between Aspen Aerogels and Owens Corning
Given the investment horizon of 90 days Aspen Aerogels is expected to generate 1.53 times less return on investment than Owens Corning. In addition to that, Aspen Aerogels is 2.99 times more volatile than Owens Corning. It trades about 0.02 of its total potential returns per unit of risk. Owens Corning is currently generating about 0.08 per unit of volatility. If you would invest 9,471 in Owens Corning on November 19, 2024 and sell it today you would earn a total of 8,467 from holding Owens Corning or generate 89.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspen Aerogels vs. Owens Corning
Performance |
| Timeline |
| Aspen Aerogels |
| Owens Corning |
Aspen Aerogels and Owens Corning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Aerogels and Owens Corning
The main advantage of trading using opposite Aspen Aerogels and Owens Corning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Aerogels 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.| Aspen Aerogels vs. Apyx Medical | Aspen Aerogels vs. Century Communities | Aspen Aerogels vs. Ardmore Shpng | Aspen Aerogels vs. American Assets Trust |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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