Correlation Between Supercom and Core Molding

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

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

Diversification Opportunities for Supercom and Core Molding

0.67

Correlation Coefficient

Supercom  Core Molding

Poor diversification

The 3 months correlation between Supercom and Core is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Supercom 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 Supercom 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 Supercom 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 Supercom i.e., Supercom and Core Molding go up and down completely randomly.

Pair Corralation between Supercom and Core Molding

Given the investment horizon of 90 days Supercom is expected to generate 2.97 times more return on investment than Core Molding. However, Supercom is 2.97 times more volatile than Core Molding Technologies. It trades about 0.15 of its potential returns per unit of risk. Core Molding Technologies is currently generating about 0.14 per unit of risk. If you would invest  619.00  in Supercom on April 27, 2025 and sell it today you would earn a total of  312.00  from holding Supercom or generate 50.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Supercom  vs.  Core Molding Technologies

Supercom

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Supercom are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental indicators, Supercom sustained solid returns over the last few months and may actually be approaching a breakup point.

Core Molding Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Core Molding Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak primary indicators, Core Molding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Supercom and Core Molding

The main advantage of trading using opposite Supercom and Core Molding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercom 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 Supercom 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.

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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.