Correlation Between Owens Corning and Environment
Can any of the company-specific risk be diversified away by investing in both Owens Corning and Environment 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 Owens Corning and Environment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Owens Corning and Environment And Alternative, you can compare the effects of market volatilities on Owens Corning and Environment 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 Owens Corning with a short position of Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Owens Corning and Environment.
Diversification Opportunities for Owens Corning and Environment
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Owens and Environment is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Owens Corning and Environment And Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Environment And Alte and Owens Corning 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 Owens Corning are associated (or correlated) with Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Environment And Alte has no effect on the direction of Owens Corning i.e., Owens Corning and Environment go up and down completely randomly.
Pair Corralation between Owens Corning and Environment
Allowing for the 90-day total investment horizon Owens Corning is expected to generate 1.84 times more return on investment than Environment. However, Owens Corning is 1.84 times more volatile than Environment And Alternative. It trades about 0.11 of its potential returns per unit of risk. Environment And Alternative is currently generating about 0.1 per unit of risk. If you would invest 8,732 in Owens Corning on August 28, 2024 and sell it today you would earn a total of 12,349 from holding Owens Corning or generate 141.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Owens Corning vs. Environment And Alternative
Performance |
| Timeline |
| Owens Corning |
| Environment And Alte |
Owens Corning and Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Owens Corning and Environment
The main advantage of trading using opposite Owens Corning and Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Owens Corning position performs unexpectedly, Environment 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 Environment will offset losses from the drop in Environment's long position.| Owens Corning vs. Trex Company | Owens Corning vs. Travis Perkins PLC | Owens Corning vs. Janus International Group | Owens Corning vs. Interface |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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