Correlation Between Jeld Wen and Lennox International
Can any of the company-specific risk be diversified away by investing in both Jeld Wen 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 Jeld Wen and Lennox International 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 Lennox International, you can compare the effects of market volatilities on Jeld Wen 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 Jeld Wen with a short position of Lennox International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeld Wen and Lennox International.
Diversification Opportunities for Jeld Wen and Lennox International
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jeld and Lennox is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Jeld Wen Holding and Lennox International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennox International 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 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 Jeld Wen i.e., Jeld Wen and Lennox International go up and down completely randomly.
Pair Corralation between Jeld Wen and Lennox International
Given the investment horizon of 90 days Jeld Wen Holding is expected to under-perform the Lennox International. In addition to that, Jeld Wen is 2.18 times more volatile than Lennox International. It trades about -0.05 of its total potential returns per unit of risk. Lennox International is currently generating about 0.1 per unit of volatility. If you would invest 42,917 in Lennox International on October 20, 2024 and sell it today you would earn a total of 21,829 from holding Lennox International or generate 50.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeld Wen Holding vs. Lennox International
Performance |
| Timeline |
| Jeld Wen Holding |
| Lennox International |
Jeld Wen and Lennox International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeld Wen and Lennox International
The main advantage of trading using opposite Jeld Wen and Lennox International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeld Wen 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.| Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Quanex Building Products | Jeld Wen vs. Perma Pipe International Holdings | Jeld Wen vs. Interface |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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