Correlation Between Washington Federal and Armstrong World
Can any of the company-specific risk be diversified away by investing in both Washington Federal and Armstrong World 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 Washington Federal and Armstrong World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Federal and Armstrong World Industries, you can compare the effects of market volatilities on Washington Federal and Armstrong World 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 Washington Federal with a short position of Armstrong World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Federal and Armstrong World.
Diversification Opportunities for Washington Federal and Armstrong World
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Washington and Armstrong is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Washington Federal and Armstrong World Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armstrong World Indu and Washington Federal 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 Washington Federal are associated (or correlated) with Armstrong World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armstrong World Indu has no effect on the direction of Washington Federal i.e., Washington Federal and Armstrong World go up and down completely randomly.
Pair Corralation between Washington Federal and Armstrong World
Given the investment horizon of 90 days Washington Federal is expected to under-perform the Armstrong World. In addition to that, Washington Federal is 1.15 times more volatile than Armstrong World Industries. It trades about -0.16 of its total potential returns per unit of risk. Armstrong World Industries is currently generating about 0.06 per unit of volatility. If you would invest 19,660 in Armstrong World Industries on July 17, 2025 and sell it today you would earn a total of 224.00 from holding Armstrong World Industries or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Washington Federal vs. Armstrong World Industries
Performance |
| Timeline |
| Washington Federal |
| Armstrong World Indu |
Washington Federal and Armstrong World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Federal and Armstrong World
The main advantage of trading using opposite Washington Federal and Armstrong World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Federal position performs unexpectedly, Armstrong World 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 World will offset losses from the drop in Armstrong World's long position.| Washington Federal vs. First Financial | Washington Federal vs. Western New England | Washington Federal vs. Southern Missouri Bancorp | Washington Federal vs. Waterstone Financial |
| Armstrong World vs. Quanex Building Products | Armstrong World vs. Apogee Enterprises | Armstrong World vs. QXO, Inc | Armstrong World vs. Janus International 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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