Correlation Between Hawkins and Core Molding

Can any of the company-specific risk be diversified away by investing in both Hawkins 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 Hawkins and Core Molding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hawkins and Core Molding Technologies, you can compare the effects of market volatilities on Hawkins 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 Hawkins with a short position of Core Molding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawkins and Core Molding.

Diversification Opportunities for Hawkins and Core Molding

0.25

Correlation Coefficient

Hawkins  Core Molding

Modest diversification

The 3 months correlation between Hawkins and Core is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins 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 Hawkins 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 Hawkins 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 Hawkins i.e., Hawkins and Core Molding go up and down completely randomly.

Pair Corralation between Hawkins and Core Molding

Given the investment horizon of 90 days Hawkins is expected to generate 1.02 times more return on investment than Core Molding. However, Hawkins is 1.02 times more volatile than Core Molding Technologies. It trades about 0.03 of its potential returns per unit of risk. Core Molding Technologies is currently generating about -0.05 per unit of risk. If you would invest  12,978  in Hawkins on September 13, 2024 and sell it today you would earn a total of  279.00  from holding Hawkins or generate 2.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Hawkins  vs.  Core Molding Technologies

Hawkins

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hawkins are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward-looking signals, Hawkins may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Core Molding Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Core Molding Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Hawkins and Core Molding

The main advantage of trading using opposite Hawkins and Core Molding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawkins 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.

The idea behind Hawkins and Core Molding Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.