Correlation Between Applied Industrial and Core Main
Can any of the company-specific risk be diversified away by investing in both Applied Industrial and Core Main 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 Applied Industrial and Core Main into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Industrial Technologies and Core Main, you can compare the effects of market volatilities on Applied Industrial and Core Main 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 Applied Industrial with a short position of Core Main. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Industrial and Core Main.
Diversification Opportunities for Applied Industrial and Core Main
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Applied and Core is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Applied Industrial Technologie and Core Main in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Main and Applied Industrial 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 Applied Industrial Technologies are associated (or correlated) with Core Main. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Main has no effect on the direction of Applied Industrial i.e., Applied Industrial and Core Main go up and down completely randomly.
Pair Corralation between Applied Industrial and Core Main
Considering the 90-day investment horizon Applied Industrial is expected to generate 1.05 times less return on investment than Core Main. In addition to that, Applied Industrial is 1.1 times more volatile than Core Main. It trades about 0.33 of its total potential returns per unit of risk. Core Main is currently generating about 0.38 per unit of volatility. If you would invest 5,133 in Core Main on November 2, 2024 and sell it today you would earn a total of 570.00 from holding Core Main or generate 11.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Industrial Technologie vs. Core Main
Performance |
| Timeline |
| Applied Industrial |
| Core Main |
Applied Industrial and Core Main Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Industrial and Core Main
The main advantage of trading using opposite Applied Industrial and Core Main positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Industrial position performs unexpectedly, Core Main 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 Core Main will offset losses from the drop in Core Main's long position.| Applied Industrial vs. Core Main | Applied Industrial vs. WW Grainger | Applied Industrial vs. DXP Enterprises | Applied Industrial vs. SiteOne Landscape Supply |
| Core Main vs. Distribution Solutions Group | Core Main vs. Global Industrial Co | Core Main vs. Applied Industrial Technologies | Core Main vs. BlueLinx Holdings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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