Correlation Between PF Industries and Nobility Homes
Can any of the company-specific risk be diversified away by investing in both PF Industries and Nobility Homes 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 PF Industries and Nobility Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PF Industries and Nobility Homes, you can compare the effects of market volatilities on PF Industries and Nobility Homes 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 PF Industries with a short position of Nobility Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of PF Industries and Nobility Homes.
Diversification Opportunities for PF Industries and Nobility Homes
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PFIN and Nobility is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding PF Industries and Nobility Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nobility Homes and PF Industries 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 PF Industries are associated (or correlated) with Nobility Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nobility Homes has no effect on the direction of PF Industries i.e., PF Industries and Nobility Homes go up and down completely randomly.
Pair Corralation between PF Industries and Nobility Homes
If you would invest 2,780 in Nobility Homes on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Nobility Homes or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PF Industries vs. Nobility Homes
Performance |
| Timeline |
| PF Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nobility Homes |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PF Industries and Nobility Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PF Industries and Nobility Homes
The main advantage of trading using opposite PF Industries and Nobility Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PF Industries position performs unexpectedly, Nobility Homes 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 Nobility Homes will offset losses from the drop in Nobility Homes' long position.| PF Industries vs. Kennametal | PF Industries vs. Hillman Solutions Corp | PF Industries vs. AB SKF | PF Industries vs. Eastern Co |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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