Correlation Between CSW Industrials, and Gates Industrial

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

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

Diversification Opportunities for CSW Industrials, and Gates Industrial

-0.41

Correlation Coefficient

CSW Industrials,  Gates Industrial

Very good diversification

The 3 months correlation between CSW and Gates is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CSW Industrials, and Gates Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gates Industrial and CSW Industrials, 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 CSW Industrials, are associated (or correlated) with Gates Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gates Industrial has no effect on the direction of CSW Industrials, i.e., CSW Industrials, and Gates Industrial go up and down completely randomly.

Pair Corralation between CSW Industrials, and Gates Industrial

Considering the 90-day investment horizon CSW Industrials, is expected to under-perform the Gates Industrial. In addition to that, CSW Industrials, is 1.21 times more volatile than Gates Industrial. It trades about -0.07 of its total potential returns per unit of risk. Gates Industrial is currently generating about 0.34 per unit of volatility. If you would invest  1,805  in Gates Industrial on April 26, 2025 and sell it today you would earn a total of  726.00  from holding Gates Industrial or generate 40.22% return on investment over 90 days.

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

CSW Industrials,  vs.  Gates Industrial

CSW Industrials,

Risk-Adjusted Performance

Very Weak

Over the last 90 days CSW Industrials, 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 latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Gates Industrial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gates Industrial are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Gates Industrial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSW Industrials, and Gates Industrial

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

The idea behind CSW Industrials, and Gates Industrial 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.