Correlation Between Leggett Platt and Amer Woodmark

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Leggett Platt and Amer Woodmark 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 Leggett Platt and Amer Woodmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leggett Platt and Amer Woodmark Cp, you can compare the effects of market volatilities on Leggett Platt and Amer Woodmark 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 Leggett Platt with a short position of Amer Woodmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leggett Platt and Amer Woodmark.

Diversification Opportunities for Leggett Platt and Amer Woodmark

0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between Leggett and Amer Woodmark is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Leggett Platt and Amer Woodmark Cp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Woodmark Cp and Leggett Platt 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 Leggett Platt are associated (or correlated) with Amer Woodmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Woodmark Cp has no effect on the direction of Leggett Platt i.e., Leggett Platt and Amer Woodmark go up and down completely randomly.

Pair Corralation between Leggett Platt and Amer Woodmark

Considering the 90-day investment horizon Leggett Platt is expected to generate 0.73 times more return on investment than Amer Woodmark. However, Leggett Platt is 1.38 times less risky than Amer Woodmark. It trades about -0.01 of its potential returns per unit of risk. Amer Woodmark Cp is currently generating about -0.04 per unit of risk. If you would invest  3,888  in Leggett Platt on June 29, 2022 and sell it today you would lose (553.00)  from holding Leggett Platt or give up 14.22% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Leggett Platt  vs.  Amer Woodmark Cp

 Performance (%) 
       Timeline  
Leggett Platt 
Leggett Performance
0 of 100
Over the last 90 days Leggett Platt has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Leggett Platt is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Leggett Price Channel

Amer Woodmark Cp 
Amer Woodmark Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Amer Woodmark Cp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Amer Woodmark is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Amer Woodmark Price Channel

Leggett Platt and Amer Woodmark Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Leggett Platt and Amer Woodmark

The main advantage of trading using opposite Leggett Platt and Amer Woodmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leggett Platt position performs unexpectedly, Amer Woodmark 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 Amer Woodmark will offset losses from the drop in Amer Woodmark's long position.
Leggett Platt vs. Clearwater Paper Corp
The idea behind Leggett Platt and Amer Woodmark Cp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Amer Woodmark vs. Clearwater Paper Corp
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

Other Complementary Tools

Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go