Correlation Between Owens Corning and Gibraltar Industries
Can any of the company-specific risk be diversified away by investing in both Owens Corning and Gibraltar Industries 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 Gibraltar Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Owens Corning and Gibraltar Industries, you can compare the effects of market volatilities on Owens Corning and Gibraltar Industries 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 Gibraltar Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Owens Corning and Gibraltar Industries.
Diversification Opportunities for Owens Corning and Gibraltar Industries
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Owens and Gibraltar is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Owens Corning and Gibraltar Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gibraltar Industries 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 Gibraltar Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gibraltar Industries has no effect on the direction of Owens Corning i.e., Owens Corning and Gibraltar Industries go up and down completely randomly.
Pair Corralation between Owens Corning and Gibraltar Industries
Allowing for the 90-day total investment horizon Owens Corning is expected to generate 0.88 times more return on investment than Gibraltar Industries. However, Owens Corning is 1.13 times less risky than Gibraltar Industries. It trades about 0.1 of its potential returns per unit of risk. Gibraltar Industries is currently generating about 0.04 per unit of risk. If you would invest 9,686 in Owens Corning on August 27, 2024 and sell it today you would earn a total of 10,591 from holding Owens Corning or generate 109.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Owens Corning vs. Gibraltar Industries
Performance |
| Timeline |
| Owens Corning |
| Gibraltar Industries |
Owens Corning and Gibraltar Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Owens Corning and Gibraltar Industries
The main advantage of trading using opposite Owens Corning and Gibraltar Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Owens Corning position performs unexpectedly, Gibraltar Industries 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 Gibraltar Industries will offset losses from the drop in Gibraltar Industries' long position.| Owens Corning vs. Trex Company | Owens Corning vs. Gibraltar Industries | Owens Corning vs. Travis Perkins PLC | Owens Corning vs. Janus International Group |
| Gibraltar Industries vs. Quanex Building Products | Gibraltar Industries vs. Jeld Wen Holding | Gibraltar Industries vs. Perma Pipe International Holdings | Gibraltar Industries 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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