Correlation Between SiteOne Landscape and Core Main
Can any of the company-specific risk be diversified away by investing in both SiteOne Landscape 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 SiteOne Landscape and Core Main into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SiteOne Landscape Supply and Core Main, you can compare the effects of market volatilities on SiteOne Landscape 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 SiteOne Landscape with a short position of Core Main. Check out your portfolio center. Please also check ongoing floating volatility patterns of SiteOne Landscape and Core Main.
Diversification Opportunities for SiteOne Landscape and Core Main
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between SiteOne and Core is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding SiteOne Landscape Supply and Core Main in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Main and SiteOne Landscape 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 SiteOne Landscape Supply 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 SiteOne Landscape i.e., SiteOne Landscape and Core Main go up and down completely randomly.
Pair Corralation between SiteOne Landscape and Core Main
Given the investment horizon of 90 days SiteOne Landscape Supply is expected to generate 0.87 times more return on investment than Core Main. However, SiteOne Landscape Supply is 1.15 times less risky than Core Main. It trades about -0.01 of its potential returns per unit of risk. Core Main is currently generating about -0.06 per unit of risk. If you would invest 15,189 in SiteOne Landscape Supply on August 24, 2024 and sell it today you would lose (875.00) from holding SiteOne Landscape Supply or give up 5.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SiteOne Landscape Supply vs. Core Main
Performance |
| Timeline |
| SiteOne Landscape Supply |
| Core Main |
SiteOne Landscape and Core Main Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SiteOne Landscape and Core Main
The main advantage of trading using opposite SiteOne Landscape and Core Main positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SiteOne Landscape 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.| SiteOne Landscape vs. DXP Enterprises | SiteOne Landscape vs. Applied Industrial Technologies | SiteOne Landscape vs. Ferguson Plc | SiteOne Landscape vs. Global Industrial Co |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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