Correlation Between Jeld Wen and Aspen Aerogels
Can any of the company-specific risk be diversified away by investing in both Jeld Wen and Aspen Aerogels 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 Jeld Wen and Aspen Aerogels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeld Wen Holding and Aspen Aerogels, you can compare the effects of market volatilities on Jeld Wen and Aspen Aerogels 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 Jeld Wen with a short position of Aspen Aerogels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeld Wen and Aspen Aerogels.
Diversification Opportunities for Jeld Wen and Aspen Aerogels
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jeld and Aspen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Jeld Wen Holding and Aspen Aerogels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Aerogels and Jeld Wen 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 Jeld Wen Holding are associated (or correlated) with Aspen Aerogels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Aerogels has no effect on the direction of Jeld Wen i.e., Jeld Wen and Aspen Aerogels go up and down completely randomly.
Pair Corralation between Jeld Wen and Aspen Aerogels
Given the investment horizon of 90 days Jeld Wen Holding is expected to generate 2.08 times more return on investment than Aspen Aerogels. However, Jeld Wen is 2.08 times more volatile than Aspen Aerogels. It trades about -0.12 of its potential returns per unit of risk. Aspen Aerogels is currently generating about -0.27 per unit of risk. If you would invest 1,411 in Jeld Wen Holding on August 30, 2024 and sell it today you would lose (330.00) from holding Jeld Wen Holding or give up 23.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeld Wen Holding vs. Aspen Aerogels
Performance |
| Timeline |
| Jeld Wen Holding |
| Aspen Aerogels |
Jeld Wen and Aspen Aerogels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeld Wen and Aspen Aerogels
The main advantage of trading using opposite Jeld Wen and Aspen Aerogels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeld Wen position performs unexpectedly, Aspen Aerogels 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 Aspen Aerogels will offset losses from the drop in Aspen Aerogels' long position.| Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Quanex Building Products | Jeld Wen vs. Perma Pipe International Holdings | Jeld Wen vs. Interface |
| Aspen Aerogels vs. Apyx Medical | Aspen Aerogels vs. Century Communities | Aspen Aerogels vs. Ardmore Shpng | Aspen Aerogels vs. American Assets Trust |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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