Correlation Between Azek and Intelligent Living
Can any of the company-specific risk be diversified away by investing in both Azek and Intelligent Living 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 Azek and Intelligent Living into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azek Company and Intelligent Living Application, you can compare the effects of market volatilities on Azek and Intelligent Living 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 Azek with a short position of Intelligent Living. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azek and Intelligent Living.
Diversification Opportunities for Azek and Intelligent Living
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Azek and Intelligent is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Azek Company and Intelligent Living Application in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelligent Living and Azek 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 Azek Company are associated (or correlated) with Intelligent Living. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelligent Living has no effect on the direction of Azek i.e., Azek and Intelligent Living go up and down completely randomly.
Pair Corralation between Azek and Intelligent Living
Given the investment horizon of 90 days Azek Company is expected to generate 0.61 times more return on investment than Intelligent Living. However, Azek Company is 1.65 times less risky than Intelligent Living. It trades about 0.52 of its potential returns per unit of risk. Intelligent Living Application is currently generating about -0.05 per unit of risk. If you would invest 4,377 in Azek Company on August 28, 2024 and sell it today you would earn a total of 957.00 from holding Azek Company or generate 21.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Azek Company vs. Intelligent Living Application
Performance |
| Timeline |
| Azek Company |
| Intelligent Living |
Azek and Intelligent Living Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Azek and Intelligent Living
The main advantage of trading using opposite Azek and Intelligent Living positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azek position performs unexpectedly, Intelligent Living 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 Intelligent Living will offset losses from the drop in Intelligent Living's long position.| Azek vs. Trex Company | Azek vs. Gibraltar Industries | Azek vs. Travis Perkins PLC | Azek vs. Janus International Group |
| Intelligent Living vs. Azek Company | Intelligent Living vs. Atlas Engineered Products | Intelligent Living vs. Antelope Enterprise Holdings | Intelligent Living vs. Latham Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |