Correlation Between TPX Old and Mohawk Industries
Can any of the company-specific risk be diversified away by investing in both TPX Old and Mohawk 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 TPX Old and Mohawk Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPX Old and Mohawk Industries, you can compare the effects of market volatilities on TPX Old and Mohawk 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 TPX Old with a short position of Mohawk Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPX Old and Mohawk Industries.
Diversification Opportunities for TPX Old and Mohawk Industries
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TPX and Mohawk is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding TPX Old and Mohawk Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mohawk Industries and TPX Old 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 TPX Old are associated (or correlated) with Mohawk Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mohawk Industries has no effect on the direction of TPX Old i.e., TPX Old and Mohawk Industries go up and down completely randomly.
Pair Corralation between TPX Old and Mohawk Industries
If you would invest 10,635 in Mohawk Industries on April 30, 2025 and sell it today you would earn a total of 1,496 from holding Mohawk Industries or generate 14.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 1.61% |
Values | Daily Returns |
TPX Old vs. Mohawk Industries
Performance |
Timeline |
TPX Old |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Mohawk Industries |
TPX Old and Mohawk Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TPX Old and Mohawk Industries
The main advantage of trading using opposite TPX Old and Mohawk Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPX Old position performs unexpectedly, Mohawk 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 Mohawk Industries will offset losses from the drop in Mohawk Industries' long position.TPX Old vs. Carters | TPX Old vs. Deckers Outdoor | TPX Old vs. Leggett Platt Incorporated | TPX Old vs. La Z Boy Incorporated |
Mohawk Industries vs. La Z Boy Incorporated | Mohawk Industries vs. MasterBrand | Mohawk Industries vs. MillerKnoll | Mohawk Industries vs. Flexsteel 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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