Correlation Between Installed Building and Mohawk Industries
Can any of the company-specific risk be diversified away by investing in both Installed Building and Mohawk Industries 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 Installed Building and Mohawk Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Installed Building Products and Mohawk Industries, you can compare the effects of market volatilities on Installed Building and Mohawk Industries 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 Installed Building with a short position of Mohawk Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Installed Building and Mohawk Industries.
Diversification Opportunities for Installed Building and Mohawk Industries
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Installed and Mohawk is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Installed Building Products and Mohawk Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mohawk Industries and Installed Building 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 Installed Building Products are associated (or correlated) with Mohawk Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mohawk Industries has no effect on the direction of Installed Building i.e., Installed Building and Mohawk Industries go up and down completely randomly.
Pair Corralation between Installed Building and Mohawk Industries
Considering the 90-day investment horizon Installed Building Products is expected to generate 1.06 times more return on investment than Mohawk Industries. However, Installed Building is 1.06 times more volatile than Mohawk Industries. It trades about 0.06 of its potential returns per unit of risk. Mohawk Industries is currently generating about -0.02 per unit of risk. If you would invest 23,999 in Installed Building Products on October 11, 2025 and sell it today you would earn a total of 1,790 from holding Installed Building Products or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Installed Building Products vs. Mohawk Industries
Performance |
| Timeline |
| Installed Building |
| Mohawk Industries |
Installed Building and Mohawk Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Installed Building and Mohawk Industries
The main advantage of trading using opposite Installed Building and Mohawk Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Installed Building position performs unexpectedly, Mohawk Industries 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 Mohawk Industries will offset losses from the drop in Mohawk Industries' long position.| Installed Building vs. Taylor Morn Home | Installed Building vs. Floor Decor Holdings | Installed Building vs. Miniso Group Holding | Installed Building vs. HR Block |
| Mohawk Industries vs. Churchill Downs Incorporated | Mohawk Industries vs. Murphy USA | Mohawk Industries vs. Floor Decor Holdings | Mohawk Industries vs. HR Block |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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