Correlation Between Core Molding and Ecolab

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

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

Diversification Opportunities for Core Molding and Ecolab

0.87

Correlation Coefficient

Core Molding  Ecolab

Very poor diversification

The 3 months correlation between Core and Ecolab is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Core Molding Technologies and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc and Core Molding 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 Core Molding Technologies are associated (or correlated) with Ecolab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecolab Inc has no effect on the direction of Core Molding i.e., Core Molding and Ecolab go up and down completely randomly.

Pair Corralation between Core Molding and Ecolab

Considering the 90-day investment horizon Core Molding is expected to generate 1.29 times less return on investment than Ecolab. In addition to that, Core Molding is 1.69 times more volatile than Ecolab Inc. It trades about 0.11 of its total potential returns per unit of risk. Ecolab Inc is currently generating about 0.24 per unit of volatility. If you would invest  23,094  in Ecolab Inc on April 21, 2025 and sell it today you would earn a total of  3,781  from holding Ecolab Inc or generate 16.37% return on investment over 90 days.

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

Core Molding Technologies  vs.  Ecolab Inc

Core Molding Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Core Molding Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak primary indicators, Core Molding may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Ecolab Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ecolab Inc are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating fundamental indicators, Ecolab disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Core Molding and Ecolab

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

The idea behind Core Molding Technologies and Ecolab Inc 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..