Correlation Between IDEX and CSWI Old

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

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

Diversification Opportunities for IDEX and CSWI Old

-0.04

Correlation Coefficient

IDEX  CSWI Old

Good diversification

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

Pair Corralation between IDEX and CSWI Old

Considering the 90-day investment horizon IDEX Corporation is expected to generate 0.67 times more return on investment than CSWI Old. However, IDEX Corporation is 1.49 times less risky than CSWI Old. It trades about 0.1 of its potential returns per unit of risk. CSWI Old is currently generating about -0.05 per unit of risk. If you would invest  17,090  in IDEX Corporation on April 29, 2025 and sell it today you would earn a total of  1,479  from holding IDEX Corporation or generate 8.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	46.77%
Values	Daily Returns

IDEX Corp.  vs.  CSWI Old

IDEX

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IDEX Corporation are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, IDEX may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CSWI Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days CSWI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, CSWI Old is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with IDEX and CSWI Old

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

The idea behind IDEX Corporation and CSWI Old 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..