Correlation Between Core Main and MSC Industrial
Can any of the company-specific risk be diversified away by investing in both Core Main and MSC Industrial 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 MSC Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Main and MSC Industrial Direct, you can compare the effects of market volatilities on Core Main and MSC Industrial 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 MSC Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Main and MSC Industrial.
Diversification Opportunities for Core Main and MSC Industrial
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Core and MSC is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Core Main and MSC Industrial Direct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSC Industrial Direct 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 MSC Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSC Industrial Direct has no effect on the direction of Core Main i.e., Core Main and MSC Industrial go up and down completely randomly.
Pair Corralation between Core Main and MSC Industrial
Considering the 90-day investment horizon Core Main is expected to generate 1.43 times more return on investment than MSC Industrial. However, Core Main is 1.43 times more volatile than MSC Industrial Direct. It trades about 0.08 of its potential returns per unit of risk. MSC Industrial Direct is currently generating about 0.02 per unit of risk. If you would invest 2,061 in Core Main on August 23, 2024 and sell it today you would earn a total of 2,396 from holding Core Main or generate 116.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Core Main vs. MSC Industrial Direct
Performance |
| Timeline |
| Core Main |
| MSC Industrial Direct |
Core Main and MSC Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Main and MSC Industrial
The main advantage of trading using opposite Core Main and MSC Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Main position performs unexpectedly, MSC Industrial 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 MSC Industrial will offset losses from the drop in MSC Industrial's 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 |
| MSC Industrial vs. DXP Enterprises | MSC Industrial vs. Core Main | MSC Industrial vs. WW Grainger | MSC Industrial vs. SiteOne Landscape Supply |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |