Correlation Between Core Molding and Perimeter Solutions
Can any of the company-specific risk be diversified away by investing in both Core Molding and Perimeter Solutions 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 Core Molding and Perimeter Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Molding Technologies and Perimeter Solutions SA, you can compare the effects of market volatilities on Core Molding and Perimeter Solutions 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 Core Molding with a short position of Perimeter Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Molding and Perimeter Solutions.
Diversification Opportunities for Core Molding and Perimeter Solutions
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Core and Perimeter is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Core Molding Technologies and Perimeter Solutions SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perimeter Solutions and Core Molding 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 Core Molding Technologies are associated (or correlated) with Perimeter Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perimeter Solutions has no effect on the direction of Core Molding i.e., Core Molding and Perimeter Solutions go up and down completely randomly.
Pair Corralation between Core Molding and Perimeter Solutions
Considering the 90-day investment horizon Core Molding is expected to generate 9.82 times less return on investment than Perimeter Solutions. But when comparing it to its historical volatility, Core Molding Technologies is 1.02 times less risky than Perimeter Solutions. It trades about 0.02 of its potential returns per unit of risk. Perimeter Solutions SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 474.00 in Perimeter Solutions SA on August 28, 2024 and sell it today you would earn a total of 837.00 from holding Perimeter Solutions SA or generate 176.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Core Molding Technologies vs. Perimeter Solutions SA
Performance |
| Timeline |
| Core Molding Technologies |
| Perimeter Solutions |
Core Molding and Perimeter Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Molding and Perimeter Solutions
The main advantage of trading using opposite Core Molding and Perimeter Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Molding position performs unexpectedly, Perimeter Solutions 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 Perimeter Solutions will offset losses from the drop in Perimeter Solutions' long position.| Core Molding vs. Quaker Chemical | Core Molding vs. Minerals Technologies | Core Molding vs. Innospec | Core Molding vs. H B Fuller |
| Perimeter Solutions vs. Orion Engineered Carbons | Perimeter Solutions vs. Cabot | Perimeter Solutions vs. Minerals Technologies | Perimeter Solutions vs. Quaker Chemical |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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