Correlation Between Trex and Jeld Wen
Can any of the company-specific risk be diversified away by investing in both Trex 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 Trex and Jeld Wen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trex Company and Jeld Wen Holding, you can compare the effects of market volatilities on Trex 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 Trex with a short position of Jeld Wen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trex and Jeld Wen.
Diversification Opportunities for Trex and Jeld Wen
Very good diversification
The 3 months correlation between Trex and Jeld is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Trex Company 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 Trex 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 Trex Company 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 Trex i.e., Trex and Jeld Wen go up and down completely randomly.
Pair Corralation between Trex and Jeld Wen
Given the investment horizon of 90 days Trex Company is expected to generate 0.3 times more return on investment than Jeld Wen. However, Trex Company is 3.36 times less risky than Jeld Wen. It trades about 0.25 of its potential returns per unit of risk. Jeld Wen Holding is currently generating about -0.15 per unit of risk. If you would invest 6,286 in Trex Company on August 24, 2024 and sell it today you would earn a total of 748.00 from holding Trex Company or generate 11.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trex Company vs. Jeld Wen Holding
Performance |
| Timeline |
| Trex Company |
| Jeld Wen Holding |
Trex and Jeld Wen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trex and Jeld Wen
The main advantage of trading using opposite Trex and Jeld Wen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trex 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.| Trex vs. Quanex Building Products | Trex vs. Armstrong World Industries | Trex vs. Gibraltar Industries | Trex vs. Apogee Enterprises |
| Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Quanex Building Products | Jeld Wen vs. Perma Pipe International Holdings | Jeld Wen 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |