Correlation Between Ametek and Fastenal

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

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

Diversification Opportunities for Ametek and Fastenal

0.04

Correlation Coefficient

Ametek  Fastenal

Significant diversification

The 3 months correlation between Ametek and Fastenal is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ametek Inc and Fastenal Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastenal and Ametek 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 Ametek Inc are associated (or correlated) with Fastenal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastenal has no effect on the direction of Ametek i.e., Ametek and Fastenal go up and down completely randomly.

Pair Corralation between Ametek and Fastenal

Considering the 90-day investment horizon Ametek Inc is expected to generate 0.77 times more return on investment than Fastenal. However, Ametek Inc is 1.3 times less risky than Fastenal. It trades about 0.08 of its potential returns per unit of risk. Fastenal Company is currently generating about -0.07 per unit of risk. If you would invest  17,855  in Ametek Inc on July 26, 2025 and sell it today you would earn a total of  1,065  from holding Ametek Inc or generate 5.96% return on investment over 90 days.

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

Ametek Inc  vs.  Fastenal Company

Ametek Inc

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Ametek Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Ametek is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Fastenal

Risk-Adjusted Performance

Weakest

Over the last 90 days Fastenal Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic 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 Ametek and Fastenal

The main advantage of trading using opposite Ametek and Fastenal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ametek position performs unexpectedly, Fastenal 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 Fastenal will offset losses from the drop in Fastenal's long position.

The idea behind Ametek Inc and Fastenal Company 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.