Correlation Between Exponent and Standex International

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

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

Diversification Opportunities for Exponent and Standex International

-0.28

Correlation Coefficient

Exponent  Standex International

Very good diversification

The 3 months correlation between Exponent and Standex is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Exponent and Standex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standex International and Exponent 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 Exponent are associated (or correlated) with Standex International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standex International has no effect on the direction of Exponent i.e., Exponent and Standex International go up and down completely randomly.

Pair Corralation between Exponent and Standex International

Given the investment horizon of 90 days Exponent is expected to under-perform the Standex International. But the stock apears to be less risky and, when comparing its historical volatility, Exponent is 1.83 times less risky than Standex International. The stock trades about -0.01 of its potential returns per unit of risk. The Standex International is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  16,485  in Standex International on July 30, 2025 and sell it today you would earn a total of  7,778  from holding Standex International or generate 47.18% return on investment over 90 days.

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

Exponent  vs.  Standex International

Exponent

Risk-Adjusted Performance

Weakest

Over the last 90 days Exponent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Exponent is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Standex International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Standex International are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Standex International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exponent and Standex International

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

The idea behind Exponent and Standex International 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.