Correlation Between Core Main and Cadre Holdings
Can any of the company-specific risk be diversified away by investing in both Core Main and Cadre Holdings 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 Main and Cadre Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Main and Cadre Holdings, you can compare the effects of market volatilities on Core Main and Cadre Holdings 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 Main with a short position of Cadre Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Main and Cadre Holdings.
Diversification Opportunities for Core Main and Cadre Holdings
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Core and Cadre is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Core Main and Cadre Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadre Holdings and Core Main 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 Main are associated (or correlated) with Cadre Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadre Holdings has no effect on the direction of Core Main i.e., Core Main and Cadre Holdings go up and down completely randomly.
Pair Corralation between Core Main and Cadre Holdings
Considering the 90-day investment horizon Core Main is expected to generate 1.92 times less return on investment than Cadre Holdings. But when comparing it to its historical volatility, Core Main is 1.54 times less risky than Cadre Holdings. It trades about 0.32 of its potential returns per unit of risk. Cadre Holdings is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 3,217 in Cadre Holdings on November 3, 2024 and sell it today you would earn a total of 638.00 from holding Cadre Holdings or generate 19.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Core Main vs. Cadre Holdings
Performance |
| Timeline |
| Core Main |
| Cadre Holdings |
Core Main and Cadre Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Main and Cadre Holdings
The main advantage of trading using opposite Core Main and Cadre Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Main position performs unexpectedly, Cadre Holdings 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 Cadre Holdings will offset losses from the drop in Cadre Holdings' long position.| Core Main vs. Distribution Solutions Group | Core Main vs. Global Industrial Co | Core Main vs. Applied Industrial Technologies | Core Main vs. BlueLinx Holdings |
| Cadre Holdings vs. European Wax Center | Cadre Holdings vs. Enfusion | Cadre Holdings vs. CiT Inc | Cadre Holdings vs. Core Main |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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