Correlation Between NYSE Composite and Armstrong Flooring
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Armstrong Flooring 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 NYSE Composite and Armstrong Flooring into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Armstrong Flooring, you can compare the effects of market volatilities on NYSE Composite and Armstrong Flooring 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 NYSE Composite with a short position of Armstrong Flooring. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Armstrong Flooring.
Diversification Opportunities for NYSE Composite and Armstrong Flooring
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Armstrong is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Armstrong Flooring in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armstrong Flooring and NYSE Composite 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 NYSE Composite are associated (or correlated) with Armstrong Flooring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armstrong Flooring has no effect on the direction of NYSE Composite i.e., NYSE Composite and Armstrong Flooring go up and down completely randomly.
Pair Corralation between NYSE Composite and Armstrong Flooring
If you would invest 1,853,937 in NYSE Composite on October 26, 2024 and sell it today you would earn a total of 143,941 from holding NYSE Composite or generate 7.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.81% |
| Values | Daily Returns |
NYSE Composite vs. Armstrong Flooring
Performance |
| Timeline |
NYSE Composite and Armstrong Flooring Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Armstrong Flooring
Pair trading matchups for Armstrong Flooring
Pair Trading with NYSE Composite and Armstrong Flooring
The main advantage of trading using opposite NYSE Composite and Armstrong Flooring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Armstrong Flooring 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 Armstrong Flooring will offset losses from the drop in Armstrong Flooring's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. Proficient Auto Logistics, | NYSE Composite vs. Hafnia Limited | NYSE Composite vs. Arm Holdings plc |
| Armstrong Flooring vs. Travis Perkins PLC | Armstrong Flooring vs. Armstrong World Industries | Armstrong Flooring vs. Apogee Enterprises | Armstrong Flooring vs. Quanex Building Products |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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