Correlation Between REX American and Core Molding
Can any of the company-specific risk be diversified away by investing in both REX American and Core Molding 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 REX American and Core Molding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REX American Resources and Core Molding Technologies, you can compare the effects of market volatilities on REX American and Core Molding 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 REX American with a short position of Core Molding. Check out your portfolio center. Please also check ongoing floating volatility patterns of REX American and Core Molding.
Diversification Opportunities for REX American and Core Molding
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between REX and Core is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding REX American Resources and Core Molding Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Molding Technologies and REX American 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 REX American Resources are associated (or correlated) with Core Molding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Molding Technologies has no effect on the direction of REX American i.e., REX American and Core Molding go up and down completely randomly.
Pair Corralation between REX American and Core Molding
Considering the 90-day investment horizon REX American Resources is expected to generate 0.77 times more return on investment than Core Molding. However, REX American Resources is 1.31 times less risky than Core Molding. It trades about -0.08 of its potential returns per unit of risk. Core Molding Technologies is currently generating about -0.15 per unit of risk. If you would invest 4,271 in REX American Resources on November 3, 2024 and sell it today you would lose (99.00) from holding REX American Resources or give up 2.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
REX American Resources vs. Core Molding Technologies
Performance |
| Timeline |
| REX American Resources |
| Core Molding Technologies |
REX American and Core Molding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REX American and Core Molding
The main advantage of trading using opposite REX American and Core Molding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REX American position performs unexpectedly, Core Molding 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 Molding will offset losses from the drop in Core Molding's long position.| REX American vs. Innospec | REX American vs. H B Fuller | REX American vs. Quaker Chemical | REX American vs. Minerals Technologies |
| Core Molding vs. Innospec | Core Molding vs. H B Fuller | Core Molding vs. Quaker Chemical | Core Molding vs. Minerals Technologies |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |