Correlation Between Travis Perkins and Armstrong Flooring
Can any of the company-specific risk be diversified away by investing in both Travis Perkins 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 Travis Perkins and Armstrong Flooring into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Travis Perkins PLC and Armstrong Flooring, you can compare the effects of market volatilities on Travis Perkins 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 Travis Perkins with a short position of Armstrong Flooring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travis Perkins and Armstrong Flooring.
Diversification Opportunities for Travis Perkins and Armstrong Flooring
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Travis and Armstrong is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Travis Perkins PLC and Armstrong Flooring in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armstrong Flooring and Travis Perkins 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 Travis Perkins PLC 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 Travis Perkins i.e., Travis Perkins and Armstrong Flooring go up and down completely randomly.
Pair Corralation between Travis Perkins and Armstrong Flooring
If you would invest 891.00 in Travis Perkins PLC on November 5, 2024 and sell it today you would lose (1.00) from holding Travis Perkins PLC or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Travis Perkins PLC vs. Armstrong Flooring
Performance |
| Timeline |
| Travis Perkins PLC |
| Armstrong Flooring |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Travis Perkins and Armstrong Flooring Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travis Perkins and Armstrong Flooring
The main advantage of trading using opposite Travis Perkins and Armstrong Flooring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travis Perkins 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.| Travis Perkins vs. Atlas Engineered Products | Travis Perkins vs. Antelope Enterprise Holdings | Travis Perkins vs. Intelligent Living Application | Travis Perkins vs. Armstrong World Industries |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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