Correlation Between Masonite International and Jeld Wen

Can any of the company-specific risk be diversified away by investing in both Masonite International and Jeld Wen 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 Masonite International and Jeld Wen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Masonite International Corp and Jeld Wen Holding, you can compare the effects of market volatilities on Masonite International and Jeld Wen 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 Masonite International with a short position of Jeld Wen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masonite International and Jeld Wen.

Diversification Opportunities for Masonite International and Jeld Wen

0.0

Correlation Coefficient

Masonite International  Jeld Wen

Pay attention - limited upside

The 3 months correlation between Masonite and Jeld is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Masonite International Corp and Jeld Wen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeld Wen Holding and Masonite International 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 Masonite International Corp are associated (or correlated) with Jeld Wen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeld Wen Holding has no effect on the direction of Masonite International i.e., Masonite International and Jeld Wen go up and down completely randomly.

Pair Corralation between Masonite International and Jeld Wen

If you would invest (100.00) in Masonite International Corp on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Masonite International Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Masonite International Corp  vs.  Jeld Wen Holding

Masonite International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Masonite International Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Masonite International is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Jeld Wen Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jeld Wen Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Masonite International and Jeld Wen

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

The idea behind Masonite International Corp and Jeld Wen Holding 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.