Correlation Between Armstrong World and Dycom Industries

Can any of the company-specific risk be diversified away by investing in both Armstrong World and Dycom 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 Armstrong World and Dycom Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Armstrong World Industries and Dycom Industries, you can compare the effects of market volatilities on Armstrong World and Dycom 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 Armstrong World with a short position of Dycom Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armstrong World and Dycom Industries.

Diversification Opportunities for Armstrong World and Dycom Industries

-0.49

Correlation Coefficient

Armstrong World  Dycom Industries

Very good diversification

The 3 months correlation between Armstrong and Dycom is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Armstrong World Industries and Dycom Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dycom Industries and Armstrong World 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 Armstrong World Industries are associated (or correlated) with Dycom Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dycom Industries has no effect on the direction of Armstrong World i.e., Armstrong World and Dycom Industries go up and down completely randomly.

Pair Corralation between Armstrong World and Dycom Industries

Considering the 90-day investment horizon Armstrong World Industries is expected to under-perform the Dycom Industries. But the stock apears to be less risky and, when comparing its historical volatility, Armstrong World Industries is 1.9 times less risky than Dycom Industries. The stock trades about -0.1 of its potential returns per unit of risk. The Dycom Industries is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  29,090  in Dycom Industries on September 12, 2025 and sell it today you would earn a total of  5,631  from holding Dycom Industries or generate 19.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Armstrong World Industries  vs.  Dycom Industries

Armstrong World Indu

Risk-Adjusted Performance

Weakest

Over the last 90 days Armstrong World Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Armstrong World is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Dycom Industries

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dycom Industries are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Dycom Industries showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Armstrong World and Dycom Industries

The main advantage of trading using opposite Armstrong World and Dycom Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armstrong World position performs unexpectedly, Dycom 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 Dycom Industries will offset losses from the drop in Dycom Industries' long position.

The idea behind Armstrong World Industries and Dycom Industries 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.