Correlation Between Smith AO and Core Main

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

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

Diversification Opportunities for Smith AO and Core Main

0.39

Correlation Coefficient

Smith AO  Core Main

Weak diversification

The 3 months correlation between Smith and Core is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Smith AO and Core Main in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Main and Smith AO 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 Smith AO 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 Smith AO i.e., Smith AO and Core Main go up and down completely randomly.

Pair Corralation between Smith AO and Core Main

Considering the 90-day investment horizon Smith AO is expected to generate 0.37 times more return on investment than Core Main. However, Smith AO is 2.73 times less risky than Core Main. It trades about -0.11 of its potential returns per unit of risk. Core Main is currently generating about -0.11 per unit of risk. If you would invest  7,146  in Smith AO on August 20, 2025 and sell it today you would lose (672.00) from holding Smith AO or give up 9.4% of portfolio value over 90 days.

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

Smith AO  vs.  Core Main

Smith AO

Risk-Adjusted Performance

Weakest

Over the last 90 days Smith AO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Core Main

Risk-Adjusted Performance

Weakest

Over the last 90 days Core Main has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Smith AO and Core Main

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

The idea behind Smith AO and Core Main 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.