Correlation Between Installed Building and Quanex Building
Can any of the company-specific risk be diversified away by investing in both Installed Building and Quanex Building 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 Quanex Building 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 Quanex Building Products, you can compare the effects of market volatilities on Installed Building and Quanex Building 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 Quanex Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Installed Building and Quanex Building.
Diversification Opportunities for Installed Building and Quanex Building
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Installed and Quanex is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Installed Building Products and Quanex Building Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanex Building Products 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 Quanex Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quanex Building Products has no effect on the direction of Installed Building i.e., Installed Building and Quanex Building go up and down completely randomly.
Pair Corralation between Installed Building and Quanex Building
Considering the 90-day investment horizon Installed Building Products is expected to generate 0.46 times more return on investment than Quanex Building. However, Installed Building Products is 2.19 times less risky than Quanex Building. It trades about 0.17 of its potential returns per unit of risk. Quanex Building Products is currently generating about -0.06 per unit of risk. If you would invest 25,521 in Installed Building Products on June 8, 2025 and sell it today you would earn a total of 1,892 from holding Installed Building Products or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Installed Building Products vs. Quanex Building Products
Performance |
| Timeline |
| Installed Building |
| Quanex Building Products |
Installed Building and Quanex Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Installed Building and Quanex Building
The main advantage of trading using opposite Installed Building and Quanex Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Installed Building position performs unexpectedly, Quanex Building 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 Quanex Building will offset losses from the drop in Quanex Building's long position.| Installed Building vs. Century Communities | Installed Building vs. MI Homes | Installed Building vs. Taylor Morn Home | Installed Building vs. TRI Pointe Homes |
| Quanex Building vs. Atlas Engineered Products | Quanex Building vs. Arlo Technologies | Quanex Building vs. Co Diagnostics | Quanex Building vs. Lakeland Industries |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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