Correlation Between Core Main and Pool
Can any of the company-specific risk be diversified away by investing in both Core Main and Pool 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 Pool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Main and Pool Corporation, you can compare the effects of market volatilities on Core Main and Pool 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 Pool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Main and Pool.
Diversification Opportunities for Core Main and Pool
Very weak diversification
The 3 months correlation between Core and Pool is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Core Main and Pool Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pool 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 Pool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pool has no effect on the direction of Core Main i.e., Core Main and Pool go up and down completely randomly.
Pair Corralation between Core Main and Pool
Considering the 90-day investment horizon Core Main is expected to generate 1.2 times more return on investment than Pool. However, Core Main is 1.2 times more volatile than Pool Corporation. It trades about 0.09 of its potential returns per unit of risk. Pool Corporation is currently generating about 0.1 per unit of risk. If you would invest 4,507 in Core Main on August 30, 2024 and sell it today you would earn a total of 204.00 from holding Core Main or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Core Main vs. Pool Corp.
Performance |
| Timeline |
| Core Main |
| Pool |
Core Main and Pool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Main and Pool
The main advantage of trading using opposite Core Main and Pool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Main position performs unexpectedly, Pool 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 Pool will offset losses from the drop in Pool's long position.| Core Main vs. DXP Enterprises | Core Main vs. Watsco Inc | Core Main vs. Distribution Solutions Group | Core Main 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |