Correlation Between Interface and Armstrong Flooring
Can any of the company-specific risk be diversified away by investing in both Interface 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 Interface and Armstrong Flooring into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interface and Armstrong Flooring, you can compare the effects of market volatilities on Interface 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 Interface with a short position of Armstrong Flooring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interface and Armstrong Flooring.
Diversification Opportunities for Interface and Armstrong Flooring
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Interface and Armstrong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Interface and Armstrong Flooring in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armstrong Flooring and Interface 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 Interface 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 Interface i.e., Interface and Armstrong Flooring go up and down completely randomly.
Pair Corralation between Interface and Armstrong Flooring
Given the investment horizon of 90 days Interface is expected to generate 855.78 times less return on investment than Armstrong Flooring. But when comparing it to its historical volatility, Interface is 141.66 times less risky than Armstrong Flooring. It trades about 0.06 of its potential returns per unit of risk. Armstrong Flooring is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Armstrong Flooring on October 25, 2024 and sell it today you would earn a total of 0.00 from holding Armstrong Flooring or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.01% |
| Values | Daily Returns |
Interface vs. Armstrong Flooring
Performance |
| Timeline |
| Interface |
| Armstrong Flooring |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Interface and Armstrong Flooring Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interface and Armstrong Flooring
The main advantage of trading using opposite Interface and Armstrong Flooring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interface 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.| Interface vs. Atos SE | Interface vs. Deveron Corp | Interface vs. Appen Limited | Interface vs. Atos Origin SA |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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