Correlation Between Janus International and Lennox International
Can any of the company-specific risk be diversified away by investing in both Janus International and Lennox International 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 Lennox International 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 Lennox International, you can compare the effects of market volatilities on Janus International and Lennox International 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 Lennox International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus International and Lennox International.
Diversification Opportunities for Janus International and Lennox International
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Janus and Lennox is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Janus International Group and Lennox International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennox International 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 Lennox International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennox International has no effect on the direction of Janus International i.e., Janus International and Lennox International go up and down completely randomly.
Pair Corralation between Janus International and Lennox International
Considering the 90-day investment horizon Janus International Group is expected to under-perform the Lennox International. In addition to that, Janus International is 1.53 times more volatile than Lennox International. It trades about -0.02 of its total potential returns per unit of risk. Lennox International is currently generating about 0.12 per unit of volatility. If you would invest 26,323 in Lennox International on August 27, 2024 and sell it today you would earn a total of 39,446 from holding Lennox International or generate 149.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Janus International Group vs. Lennox International
Performance |
| Timeline |
| Janus International |
| Lennox International |
Janus International and Lennox International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Janus International and Lennox International
The main advantage of trading using opposite Janus International and Lennox International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus International position performs unexpectedly, Lennox International 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 Lennox International will offset losses from the drop in Lennox International's long position.| Janus International vs. Quanex Building Products | Janus International vs. Interface | Janus International vs. Apogee Enterprises | Janus International vs. Gibraltar Industries |
| Lennox International vs. Carrier Global Corp | Lennox International vs. Johnson Controls International | Lennox International vs. Masco | Lennox International vs. Carlisle Companies Incorporated |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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