Correlation Between Janus International and Azek
Can any of the company-specific risk be diversified away by investing in both Janus International and Azek 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 Janus International and Azek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Janus International Group and Azek Company, you can compare the effects of market volatilities on Janus International and Azek 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 Janus International with a short position of Azek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus International and Azek.
Diversification Opportunities for Janus International and Azek
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Janus and Azek is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Janus International Group and Azek Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azek Company and Janus International 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 Janus International Group are associated (or correlated) with Azek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azek Company has no effect on the direction of Janus International i.e., Janus International and Azek go up and down completely randomly.
Pair Corralation between Janus International and Azek
Considering the 90-day investment horizon Janus International Group is expected to under-perform the Azek. In addition to that, Janus International is 1.46 times more volatile than Azek Company. It trades about -0.09 of its total potential returns per unit of risk. Azek Company is currently generating about 0.03 per unit of volatility. If you would invest 4,811 in Azek Company on August 27, 2024 and sell it today you would earn a total of 287.00 from holding Azek Company or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Janus International Group vs. Azek Company
Performance |
| Timeline |
| Janus International |
| Azek Company |
Janus International and Azek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus International and Azek
The main advantage of trading using opposite Janus International and Azek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus International position performs unexpectedly, Azek 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 Azek will offset losses from the drop in Azek's long position.| Janus International vs. Quanex Building Products | Janus International vs. Interface | Janus International vs. Apogee Enterprises | Janus International vs. Gibraltar Industries |
| Azek vs. Trex Company | Azek vs. Gibraltar Industries | Azek vs. Travis Perkins PLC | Azek vs. Janus International 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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