Correlation Between Flowserve and Core Laboratories

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

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

Diversification Opportunities for Flowserve and Core Laboratories

0.04

Correlation Coefficient

Flowserve  Core Laboratories

Significant diversification

The 3 months correlation between Flowserve and Core is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Flowserve and Core Laboratories NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Laboratories and Flowserve 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 Flowserve are associated (or correlated) with Core Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Laboratories has no effect on the direction of Flowserve i.e., Flowserve and Core Laboratories go up and down completely randomly.

Pair Corralation between Flowserve and Core Laboratories

Considering the 90-day investment horizon Flowserve is expected to generate 0.61 times more return on investment than Core Laboratories. However, Flowserve is 1.65 times less risky than Core Laboratories. It trades about 0.01 of its potential returns per unit of risk. Core Laboratories NV is currently generating about -0.07 per unit of risk. If you would invest  5,190  in Flowserve on May 13, 2025 and sell it today you would earn a total of  24.00  from holding Flowserve or generate 0.46% return on investment over 90 days.

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

Flowserve  vs.  Core Laboratories NV

Flowserve

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Flowserve are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Flowserve is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Core Laboratories

Risk-Adjusted Performance

Weakest

Over the last 90 days Core Laboratories NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Flowserve and Core Laboratories

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

The idea behind Flowserve and Core Laboratories NV 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 Valuation module to check real value of public entities based on technical and fundamental data.