Correlation Between Owens Corning and Jeld Wen
Can any of the company-specific risk be diversified away by investing in both Owens Corning 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 Owens Corning and Jeld Wen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Owens Corning and Jeld Wen Holding, you can compare the effects of market volatilities on Owens Corning 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 Owens Corning with a short position of Jeld Wen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Owens Corning and Jeld Wen.
Diversification Opportunities for Owens Corning and Jeld Wen
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Owens and Jeld is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Owens Corning 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 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 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 Owens Corning i.e., Owens Corning and Jeld Wen go up and down completely randomly.
Pair Corralation between Owens Corning and Jeld Wen
Allowing for the 90-day total investment horizon Owens Corning is expected to generate 0.51 times more return on investment than Jeld Wen. However, Owens Corning is 1.95 times less risky than Jeld Wen. It trades about 0.1 of its potential returns per unit of risk. Jeld Wen Holding is currently generating about -0.02 per unit of risk. If you would invest 13,360 in Owens Corning on August 26, 2024 and sell it today you would earn a total of 6,917 from holding Owens Corning or generate 51.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Owens Corning vs. Jeld Wen Holding
Performance |
| Timeline |
| Owens Corning |
| Jeld Wen Holding |
Owens Corning and Jeld Wen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Owens Corning and Jeld Wen
The main advantage of trading using opposite Owens Corning and Jeld Wen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Owens Corning 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.| Owens Corning vs. Trane Technologies plc | Owens Corning vs. Masco | Owens Corning vs. Quanex Building Products | Owens Corning vs. Jeld Wen Holding |
| Jeld Wen vs. Trex Company | Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Travis Perkins PLC | Jeld Wen vs. Janus International Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |