Correlation Between WW Grainger and Core Main
Can any of the company-specific risk be diversified away by investing in both WW Grainger 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 WW Grainger and Core Main into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WW Grainger and Core Main, you can compare the effects of market volatilities on WW Grainger 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 WW Grainger with a short position of Core Main. Check out your portfolio center. Please also check ongoing floating volatility patterns of WW Grainger and Core Main.
Diversification Opportunities for WW Grainger and Core Main
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GWW and Core is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding WW Grainger and Core Main in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Main and WW Grainger 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 WW Grainger 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 WW Grainger i.e., WW Grainger and Core Main go up and down completely randomly.
Pair Corralation between WW Grainger and Core Main
Considering the 90-day investment horizon WW Grainger is expected to under-perform the Core Main. In addition to that, WW Grainger is 1.25 times more volatile than Core Main. It trades about -0.25 of its total potential returns per unit of risk. Core Main is currently generating about -0.06 per unit of volatility. If you would invest 5,522 in Core Main on November 18, 2024 and sell it today you would lose (91.00) from holding Core Main or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WW Grainger vs. Core Main
Performance |
| Timeline |
| WW Grainger |
| Core Main |
WW Grainger and Core Main Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WW Grainger and Core Main
The main advantage of trading using opposite WW Grainger and Core Main positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WW Grainger 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.| WW Grainger vs. Watsco Inc | WW Grainger vs. Pool Corporation | WW Grainger vs. MSC Industrial Direct | WW Grainger vs. Applied Industrial Technologies |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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