Correlation Between AZZ Incorporated and Worthington Industries
Can any of the company-specific risk be diversified away by investing in both AZZ Incorporated and Worthington Industries 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 AZZ Incorporated and Worthington Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AZZ Incorporated and Worthington Industries, you can compare the effects of market volatilities on AZZ Incorporated and Worthington Industries 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 AZZ Incorporated with a short position of Worthington Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of AZZ Incorporated and Worthington Industries.
Diversification Opportunities for AZZ Incorporated and Worthington Industries
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between AZZ and Worthington is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding AZZ Incorporated and Worthington Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worthington Industries and AZZ Incorporated 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 AZZ Incorporated are associated (or correlated) with Worthington Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worthington Industries has no effect on the direction of AZZ Incorporated i.e., AZZ Incorporated and Worthington Industries go up and down completely randomly.
Pair Corralation between AZZ Incorporated and Worthington Industries
Considering the 90-day investment horizon AZZ Incorporated is expected to generate 0.97 times more return on investment than Worthington Industries. However, AZZ Incorporated is 1.03 times less risky than Worthington Industries. It trades about 0.36 of its potential returns per unit of risk. Worthington Industries is currently generating about 0.12 per unit of risk. If you would invest 7,618 in AZZ Incorporated on September 1, 2024 and sell it today you would earn a total of 1,696 from holding AZZ Incorporated or generate 22.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AZZ Incorporated vs. Worthington Industries
Performance |
| Timeline |
| AZZ Incorporated |
| Worthington Industries |
AZZ Incorporated and Worthington Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AZZ Incorporated and Worthington Industries
The main advantage of trading using opposite AZZ Incorporated and Worthington Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AZZ Incorporated position performs unexpectedly, Worthington Industries 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 Worthington Industries will offset losses from the drop in Worthington Industries' long position.| AZZ Incorporated vs. Maximus | AZZ Incorporated vs. ABM Industries Incorporated | AZZ Incorporated vs. CBIZ Inc | AZZ Incorporated vs. Cass Information Systems |
| Worthington Industries vs. ESAB Corp | Worthington Industries vs. Insteel Industries | Worthington Industries vs. Northwest Pipe | Worthington Industries vs. Carpenter Technology |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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