Correlation Between Quanex Building and Allegion PLC
Can any of the company-specific risk be diversified away by investing in both Quanex Building and Allegion PLC 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 Quanex Building and Allegion PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quanex Building Products and Allegion PLC, you can compare the effects of market volatilities on Quanex Building and Allegion PLC 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 Quanex Building with a short position of Allegion PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quanex Building and Allegion PLC.
Diversification Opportunities for Quanex Building and Allegion PLC
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Quanex and Allegion is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Quanex Building Products and Allegion PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegion PLC and Quanex 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 Quanex Building Products are associated (or correlated) with Allegion PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegion PLC has no effect on the direction of Quanex Building i.e., Quanex Building and Allegion PLC go up and down completely randomly.
Pair Corralation between Quanex Building and Allegion PLC
Allowing for the 90-day total investment horizon Quanex Building Products is expected to under-perform the Allegion PLC. In addition to that, Quanex Building is 2.76 times more volatile than Allegion PLC. It trades about -0.21 of its total potential returns per unit of risk. Allegion PLC is currently generating about 0.0 per unit of volatility. If you would invest 16,806 in Allegion PLC on August 14, 2025 and sell it today you would lose (51.00) from holding Allegion PLC or give up 0.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quanex Building Products vs. Allegion PLC
Performance |
| Timeline |
| Quanex Building Products |
| Allegion PLC |
Quanex Building and Allegion PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quanex Building and Allegion PLC
The main advantage of trading using opposite Quanex Building and Allegion PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quanex Building position performs unexpectedly, Allegion PLC 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 Allegion PLC will offset losses from the drop in Allegion PLC's long position.| Quanex Building vs. Aspen Aerogels | Quanex Building vs. FTAI Infrastructure | Quanex Building vs. Apogee Enterprises | Quanex Building vs. BlueLinx Holdings |
| Allegion PLC vs. Textron | Allegion PLC vs. Carlisle Companies Incorporated | Allegion PLC vs. Avery Dennison Corp | Allegion PLC vs. LATAM Airlines Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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