Correlation Between CSW Industrials, and Matrix Service

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

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

Diversification Opportunities for CSW Industrials, and Matrix Service

-0.64

Correlation Coefficient

CSW Industrials,  Matrix Service

Excellent diversification

The 3 months correlation between CSW and Matrix is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding CSW Industrials, and Matrix Service Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matrix Service 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 Matrix Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matrix Service has no effect on the direction of CSW Industrials, i.e., CSW Industrials, and Matrix Service go up and down completely randomly.

Pair Corralation between CSW Industrials, and Matrix Service

Considering the 90-day investment horizon CSW Industrials, is expected to under-perform the Matrix Service. But the stock apears to be less risky and, when comparing its historical volatility, CSW Industrials, is 1.02 times less risky than Matrix Service. The stock trades about -0.17 of its potential returns per unit of risk. The Matrix Service Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,289  in Matrix Service Co on May 11, 2025 and sell it today you would earn a total of  202.00  from holding Matrix Service Co or generate 15.67% return on investment over 90 days.

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

CSW Industrials,  vs.  Matrix Service Co

CSW Industrials,

Risk-Adjusted Performance

Weakest

Over the last 90 days CSW Industrials, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in September 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Matrix Service

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Matrix Service Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Matrix Service showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSW Industrials, and Matrix Service

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

The idea behind CSW Industrials, and Matrix Service Co 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.