Correlation Between Louisiana Pacific and Jeld Wen
Can any of the company-specific risk be diversified away by investing in both Louisiana Pacific 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 Louisiana Pacific and Jeld Wen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Louisiana Pacific and Jeld Wen Holding, you can compare the effects of market volatilities on Louisiana Pacific 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 Louisiana Pacific with a short position of Jeld Wen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Louisiana Pacific and Jeld Wen.
Diversification Opportunities for Louisiana Pacific and Jeld Wen
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Louisiana and Jeld is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Louisiana Pacific 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 Louisiana Pacific 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 Louisiana Pacific 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 Louisiana Pacific i.e., Louisiana Pacific and Jeld Wen go up and down completely randomly.
Pair Corralation between Louisiana Pacific and Jeld Wen
Considering the 90-day investment horizon Louisiana Pacific is expected to generate 0.33 times more return on investment than Jeld Wen. However, Louisiana Pacific is 3.04 times less risky than Jeld Wen. It trades about 0.27 of its potential returns per unit of risk. Jeld Wen Holding is currently generating about -0.16 per unit of risk. If you would invest 9,941 in Louisiana Pacific on August 23, 2024 and sell it today you would earn a total of 1,499 from holding Louisiana Pacific or generate 15.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Louisiana Pacific vs. Jeld Wen Holding
Performance |
| Timeline |
| Louisiana Pacific |
| Jeld Wen Holding |
Louisiana Pacific and Jeld Wen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Louisiana Pacific and Jeld Wen
The main advantage of trading using opposite Louisiana Pacific and Jeld Wen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Louisiana Pacific 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.| Louisiana Pacific vs. Lennox International | Louisiana Pacific vs. Fortune Brands Innovations | Louisiana Pacific vs. Trane Technologies plc | Louisiana Pacific vs. Johnson Controls International |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |