Correlation Between Core Main and Fastenal

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

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

Diversification Opportunities for Core Main and Fastenal

0.63

Correlation Coefficient

Core Main  Fastenal

Poor diversification

The 3 months correlation between Core and Fastenal is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Core Main and Fastenal Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastenal and Core Main 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 Main 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 Core Main i.e., Core Main and Fastenal go up and down completely randomly.

Pair Corralation between Core Main and Fastenal

Considering the 90-day investment horizon Core Main is expected to generate 1.53 times more return on investment than Fastenal. However, Core Main is 1.53 times more volatile than Fastenal Company. It trades about 0.2 of its potential returns per unit of risk. Fastenal Company is currently generating about 0.23 per unit of risk. If you would invest  5,329  in Core Main on May 17, 2025 and sell it today you would earn a total of  1,237  from holding Core Main or generate 23.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Core Main  vs.  Fastenal Company

Core Main

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Core Main are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Core Main displayed solid returns over the last few months and may actually be approaching a breakup point.

Fastenal

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fastenal Company are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fastenal unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Core Main and Fastenal

The main advantage of trading using opposite Core Main and Fastenal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Main 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 Core Main 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.