Correlation Between Insteel Industries and Marine Products
Can any of the company-specific risk be diversified away by investing in both Insteel Industries and Marine Products 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 Insteel Industries and Marine Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insteel Industries and Marine Products, you can compare the effects of market volatilities on Insteel Industries and Marine Products 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 Insteel Industries with a short position of Marine Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insteel Industries and Marine Products.
Diversification Opportunities for Insteel Industries and Marine Products
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Insteel and Marine is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Insteel Industries and Marine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Products and Insteel 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 Insteel Industries are associated (or correlated) with Marine Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Products has no effect on the direction of Insteel Industries i.e., Insteel Industries and Marine Products go up and down completely randomly.
Pair Corralation between Insteel Industries and Marine Products
Given the investment horizon of 90 days Insteel Industries is expected to under-perform the Marine Products. But the stock apears to be less risky and, when comparing its historical volatility, Insteel Industries is 1.18 times less risky than Marine Products. The stock trades about -0.02 of its potential returns per unit of risk. The Marine Products is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 935.00 in Marine Products on September 2, 2024 and sell it today you would earn a total of 54.00 from holding Marine Products or generate 5.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insteel Industries vs. Marine Products
Performance |
| Timeline |
| Insteel Industries |
| Marine Products |
Insteel Industries and Marine Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insteel Industries and Marine Products
The main advantage of trading using opposite Insteel Industries and Marine Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insteel Industries position performs unexpectedly, Marine Products 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 Marine Products will offset losses from the drop in Marine Products' long position.| Insteel Industries vs. Mayville Engineering Co | Insteel Industries vs. Gulf Island Fabrication | Insteel Industries vs. ESAB Corp | Insteel Industries vs. Northwest Pipe |
| Marine Products vs. LCI Industries | Marine Products vs. MCBC Holdings | Marine Products vs. Winnebago Industries | Marine Products vs. Thor Industries |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| 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 |