Correlation Between CSW Industrials, and Helios Technologies

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

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

Diversification Opportunities for CSW Industrials, and Helios Technologies

-0.44

Correlation Coefficient

CSW Industrials,  Helios Technologies

Very good diversification

The 3 months correlation between CSW and Helios is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding CSW Industrials, and Helios Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Technologies 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 Helios Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helios Technologies has no effect on the direction of CSW Industrials, i.e., CSW Industrials, and Helios Technologies go up and down completely randomly.

Pair Corralation between CSW Industrials, and Helios Technologies

Considering the 90-day investment horizon CSW Industrials, is expected to under-perform the Helios Technologies. But the stock apears to be less risky and, when comparing its historical volatility, CSW Industrials, is 1.49 times less risky than Helios Technologies. The stock trades about -0.07 of its potential returns per unit of risk. The Helios Technologies is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  2,719  in Helios Technologies on April 30, 2025 and sell it today you would earn a total of  1,091  from holding Helios Technologies or generate 40.13% 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.  Helios Technologies

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 inconsistent 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.

Helios Technologies

Risk-Adjusted Performance

Good

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

Pair Trading with CSW Industrials, and Helios Technologies

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

The idea behind CSW Industrials, and Helios Technologies 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.