Correlation Between SERI INDUSTRIAL and Fastenal

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

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

Diversification Opportunities for SERI INDUSTRIAL and Fastenal

-0.1

Correlation Coefficient

SERI INDUSTRIAL  Fastenal

Good diversification

The 3 months correlation between SERI and Fastenal is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding SERI INDUSTRIAL EO and Fastenal Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastenal and SERI INDUSTRIAL 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 SERI INDUSTRIAL EO are associated (or correlated) with Fastenal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastenal has no effect on the direction of SERI INDUSTRIAL i.e., SERI INDUSTRIAL and Fastenal go up and down completely randomly.

Pair Corralation between SERI INDUSTRIAL and Fastenal

Assuming the 90 days trading horizon SERI INDUSTRIAL is expected to generate 2.23 times less return on investment than Fastenal. In addition to that, SERI INDUSTRIAL is 2.77 times more volatile than Fastenal Company. It trades about 0.03 of its total potential returns per unit of risk. Fastenal Company is currently generating about 0.16 per unit of volatility. If you would invest  3,670  in Fastenal Company on May 18, 2025 and sell it today you would earn a total of  488.00  from holding Fastenal Company or generate 13.3% return on investment over 90 days.

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

SERI INDUSTRIAL EO  vs.  Fastenal Company

SERI INDUSTRIAL EO

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SERI INDUSTRIAL EO are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, SERI INDUSTRIAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Fastenal

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fastenal Company are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Fastenal may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with SERI INDUSTRIAL and Fastenal

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

The idea behind SERI INDUSTRIAL EO and Fastenal Company 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.