Correlation Between Tandy Leather and Jeld Wen
Can any of the company-specific risk be diversified away by investing in both Tandy Leather 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 Tandy Leather and Jeld Wen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tandy Leather Factory and Jeld Wen Holding, you can compare the effects of market volatilities on Tandy Leather 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 Tandy Leather with a short position of Jeld Wen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tandy Leather and Jeld Wen.
Diversification Opportunities for Tandy Leather and Jeld Wen
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tandy and Jeld is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Tandy Leather Factory 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 Tandy Leather 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 Tandy Leather Factory 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 Tandy Leather i.e., Tandy Leather and Jeld Wen go up and down completely randomly.
Pair Corralation between Tandy Leather and Jeld Wen
Considering the 90-day investment horizon Tandy Leather Factory is expected to generate 0.46 times more return on investment than Jeld Wen. However, Tandy Leather Factory is 2.17 times less risky than Jeld Wen. It trades about -0.04 of its potential returns per unit of risk. Jeld Wen Holding is currently generating about -0.05 per unit of risk. If you would invest 459.00 in Tandy Leather Factory on September 1, 2024 and sell it today you would lose (50.00) from holding Tandy Leather Factory or give up 10.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tandy Leather Factory vs. Jeld Wen Holding
Performance |
| Timeline |
| Tandy Leather Factory |
| Jeld Wen Holding |
Tandy Leather and Jeld Wen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tandy Leather and Jeld Wen
The main advantage of trading using opposite Tandy Leather and Jeld Wen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tandy Leather 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.| Tandy Leather vs. Capri Holdings | Tandy Leather vs. Movado Group | Tandy Leather vs. Tapestry | Tandy Leather vs. Brilliant Earth Group |
| Jeld Wen vs. Trex Company | Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Apogee Enterprises | Jeld Wen vs. Travis Perkins PLC |
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 Stocks Directory module to find actively traded stocks across global markets.
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