Correlation Between EVI Industries and Core Main
Can any of the company-specific risk be diversified away by investing in both EVI Industries 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 EVI Industries and Core Main into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EVI Industries and Core Main, you can compare the effects of market volatilities on EVI Industries 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 EVI Industries with a short position of Core Main. Check out your portfolio center. Please also check ongoing floating volatility patterns of EVI Industries and Core Main.
Diversification Opportunities for EVI Industries and Core Main
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EVI and Core is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding EVI Industries and Core Main in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Main and EVI Industries 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 EVI Industries 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 EVI Industries i.e., EVI Industries and Core Main go up and down completely randomly.
Pair Corralation between EVI Industries and Core Main
Considering the 90-day investment horizon EVI Industries is expected to generate 1.16 times less return on investment than Core Main. In addition to that, EVI Industries is 1.09 times more volatile than Core Main. It trades about 0.06 of its total potential returns per unit of risk. Core Main is currently generating about 0.08 per unit of volatility. If you would invest 4,680 in Core Main on November 2, 2024 and sell it today you would earn a total of 1,023 from holding Core Main or generate 21.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EVI Industries vs. Core Main
Performance |
| Timeline |
| EVI Industries |
| Core Main |
EVI Industries and Core Main Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EVI Industries and Core Main
The main advantage of trading using opposite EVI Industries and Core Main positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVI Industries 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.| EVI Industries vs. DXP Enterprises | EVI Industries vs. Global Industrial Co | EVI Industries vs. Core Main | EVI Industries vs. Watsco Inc |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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