Correlation Between BAIYU Holdings and Jeld Wen
Can any of the company-specific risk be diversified away by investing in both BAIYU Holdings and Jeld Wen 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 BAIYU Holdings and Jeld Wen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BAIYU Holdings and Jeld Wen Holding, you can compare the effects of market volatilities on BAIYU Holdings and Jeld Wen 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 BAIYU Holdings with a short position of Jeld Wen. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAIYU Holdings and Jeld Wen.
Diversification Opportunities for BAIYU Holdings and Jeld Wen
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BAIYU and Jeld is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding BAIYU Holdings and Jeld Wen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeld Wen Holding and BAIYU Holdings 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 BAIYU Holdings are associated (or correlated) with Jeld Wen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeld Wen Holding has no effect on the direction of BAIYU Holdings i.e., BAIYU Holdings and Jeld Wen go up and down completely randomly.
Pair Corralation between BAIYU Holdings and Jeld Wen
Considering the 90-day investment horizon BAIYU Holdings is expected to generate 0.57 times more return on investment than Jeld Wen. However, BAIYU Holdings is 1.74 times less risky than Jeld Wen. It trades about -0.15 of its potential returns per unit of risk. Jeld Wen Holding is currently generating about -0.12 per unit of risk. If you would invest 20.00 in BAIYU Holdings on September 4, 2024 and sell it today you would lose (2.00) from holding BAIYU Holdings or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 66.67% |
| Values | Daily Returns |
BAIYU Holdings vs. Jeld Wen Holding
Performance |
| Timeline |
| BAIYU Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jeld Wen Holding |
BAIYU Holdings and Jeld Wen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAIYU Holdings and Jeld Wen
The main advantage of trading using opposite BAIYU Holdings and Jeld Wen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAIYU Holdings position performs unexpectedly, Jeld Wen 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 Jeld Wen will offset losses from the drop in Jeld Wen's long position.| BAIYU Holdings vs. GE Vernova LLC | BAIYU Holdings vs. NRG Energy | BAIYU Holdings vs. Old Republic International | BAIYU Holdings vs. Cincinnati Financial |
| Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Quanex Building Products | Jeld Wen vs. Perma Pipe International Holdings | Jeld Wen vs. Interface |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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