Correlation Between Flowserve and CSW Industrials
Can any of the company-specific risk be diversified away by investing in both Flowserve and CSW Industrials 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 Flowserve and CSW Industrials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flowserve and CSW Industrials, you can compare the effects of market volatilities on Flowserve and CSW Industrials 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 Flowserve with a short position of CSW Industrials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flowserve and CSW Industrials.
Diversification Opportunities for Flowserve and CSW Industrials
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Flowserve and CSW is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Flowserve and CSW Industrials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSW Industrials and Flowserve 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 Flowserve are associated (or correlated) with CSW Industrials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSW Industrials has no effect on the direction of Flowserve i.e., Flowserve and CSW Industrials go up and down completely randomly.
Pair Corralation between Flowserve and CSW Industrials
Considering the 90-day investment horizon Flowserve is expected to generate 1.76 times less return on investment than CSW Industrials. But when comparing it to its historical volatility, Flowserve is 1.12 times less risky than CSW Industrials. It trades about 0.09 of its potential returns per unit of risk. CSW Industrials is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 11,792 in CSW Industrials on August 24, 2024 and sell it today you would earn a total of 30,874 from holding CSW Industrials or generate 261.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flowserve vs. CSW Industrials
Performance |
| Timeline |
| Flowserve |
| CSW Industrials |
Flowserve and CSW Industrials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flowserve and CSW Industrials
The main advantage of trading using opposite Flowserve and CSW Industrials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flowserve position performs unexpectedly, CSW Industrials 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 CSW Industrials will offset losses from the drop in CSW Industrials' long position.| Flowserve vs. Pentair PLC | Flowserve vs. Parker Hannifin | Flowserve vs. Emerson Electric | Flowserve vs. Smith AO |
| CSW Industrials vs. Enerpac Tool Group | CSW Industrials vs. Luxfer Holdings PLC | CSW Industrials vs. John Bean Technologies | CSW Industrials vs. ITT Inc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| 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 | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |