Correlation Between 5E Advanced and Core Molding

Can any of the company-specific risk be diversified away by investing in both 5E Advanced and Core Molding 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 5E Advanced and Core Molding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 5E Advanced Materials and Core Molding Technologies, you can compare the effects of market volatilities on 5E Advanced and Core Molding 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 5E Advanced with a short position of Core Molding. Check out your portfolio center. Please also check ongoing floating volatility patterns of 5E Advanced and Core Molding.

Diversification Opportunities for 5E Advanced and Core Molding

-0.53

Correlation Coefficient

5E Advanced  Core Molding

Excellent diversification

The 3 months correlation between FEAM and Core is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding 5E Advanced Materials and Core Molding Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Molding Technologies and 5E Advanced 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 5E Advanced Materials are associated (or correlated) with Core Molding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Molding Technologies has no effect on the direction of 5E Advanced i.e., 5E Advanced and Core Molding go up and down completely randomly.

Pair Corralation between 5E Advanced and Core Molding

Given the investment horizon of 90 days 5E Advanced Materials is expected to generate 4.48 times more return on investment than Core Molding. However, 5E Advanced is 4.48 times more volatile than Core Molding Technologies. It trades about 0.07 of its potential returns per unit of risk. Core Molding Technologies is currently generating about 0.1 per unit of risk. If you would invest  431.00  in 5E Advanced Materials on May 14, 2025 and sell it today you would earn a total of  89.00  from holding 5E Advanced Materials or generate 20.65% return on investment over 90 days.

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

5E Advanced Materials  vs.  Core Molding Technologies

5E Advanced Materials

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in 5E Advanced Materials are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, 5E Advanced displayed solid returns over the last few months and may actually be approaching a breakup point.

Core Molding Technologies

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Core Molding Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak primary indicators, Core Molding may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with 5E Advanced and Core Molding

The main advantage of trading using opposite 5E Advanced and Core Molding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 5E Advanced position performs unexpectedly, Core Molding 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 Core Molding will offset losses from the drop in Core Molding's long position.

The idea behind 5E Advanced Materials and Core Molding 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.