Correlation Between Cornerstone Strategic and Element Solutions

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

By analyzing existing cross correlation between Cornerstone Strategic Value and Element Solutions, you can compare the effects of market volatilities on Cornerstone Strategic and Element Solutions 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 Cornerstone Strategic with a short position of Element Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornerstone Strategic and Element Solutions.

Diversification Opportunities for Cornerstone Strategic and Element Solutions

0.83

Correlation Coefficient

Cornerstone Strategic  Element Solutions

Very poor diversification

The 3 months correlation between Cornerstone and Element is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Value and Element Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element Solutions and Cornerstone Strategic 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 Cornerstone Strategic Value are associated (or correlated) with Element Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element Solutions has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and Element Solutions go up and down completely randomly.

Pair Corralation between Cornerstone Strategic and Element Solutions

Considering the 90-day investment horizon Cornerstone Strategic is expected to generate 1.47 times less return on investment than Element Solutions. But when comparing it to its historical volatility, Cornerstone Strategic Value is 2.71 times less risky than Element Solutions. It trades about 0.16 of its potential returns per unit of risk. Element Solutions is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,306  in Element Solutions on July 1, 2025 and sell it today you would earn a total of  191.00  from holding Element Solutions or generate 8.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Cornerstone Strategic Value  vs.  Element Solutions

Cornerstone Strategic

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cornerstone Strategic Value are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy essential indicators, Cornerstone Strategic is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Element Solutions

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Element Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Element Solutions may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with Cornerstone Strategic and Element Solutions

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

The idea behind Cornerstone Strategic Value and Element Solutions 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.