Correlation Between Lennox International and Jeld Wen
Can any of the company-specific risk be diversified away by investing in both Lennox International 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 Lennox International and Jeld Wen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lennox International and Jeld Wen Holding, you can compare the effects of market volatilities on Lennox International 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 Lennox International with a short position of Jeld Wen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lennox International and Jeld Wen.
Diversification Opportunities for Lennox International and Jeld Wen
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lennox and Jeld is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lennox International 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 Lennox 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 Lennox International 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 Lennox International i.e., Lennox International and Jeld Wen go up and down completely randomly.
Pair Corralation between Lennox International and Jeld Wen
Considering the 90-day investment horizon Lennox International is expected to generate 0.25 times more return on investment than Jeld Wen. However, Lennox International is 4.06 times less risky than Jeld Wen. It trades about 0.17 of its potential returns per unit of risk. Jeld Wen Holding is currently generating about -0.15 per unit of risk. If you would invest 60,974 in Lennox International on August 24, 2024 and sell it today you would earn a total of 4,086 from holding Lennox International or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lennox International vs. Jeld Wen Holding
Performance |
| Timeline |
| Lennox International |
| Jeld Wen Holding |
Lennox International and Jeld Wen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lennox International and Jeld Wen
The main advantage of trading using opposite Lennox International and Jeld Wen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lennox International 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.| Lennox International vs. Carrier Global Corp | Lennox International vs. Johnson Controls International | Lennox International vs. Masco | Lennox International vs. Carlisle Companies Incorporated |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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