Correlation Between Simpson Manufacturing and Linamar

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

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

Diversification Opportunities for Simpson Manufacturing and Linamar

0.5

Correlation Coefficient

Simpson Manufacturing  Linamar

Very weak diversification

The 3 months correlation between Simpson and Linamar is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Simpson Manufacturing and Linamar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linamar and Simpson Manufacturing 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 Simpson Manufacturing are associated (or correlated) with Linamar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linamar has no effect on the direction of Simpson Manufacturing i.e., Simpson Manufacturing and Linamar go up and down completely randomly.

Pair Corralation between Simpson Manufacturing and Linamar

Considering the 90-day investment horizon Simpson Manufacturing is expected to generate 1.3 times less return on investment than Linamar. In addition to that, Simpson Manufacturing is 1.49 times more volatile than Linamar. It trades about 0.09 of its total potential returns per unit of risk. Linamar is currently generating about 0.17 per unit of volatility. If you would invest  4,325  in Linamar on May 11, 2025 and sell it today you would earn a total of  650.00  from holding Linamar or generate 15.03% return on investment over 90 days.

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

Simpson Manufacturing  vs.  Linamar

Simpson Manufacturing

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Simpson Manufacturing are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Simpson Manufacturing may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Linamar

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Linamar are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Linamar reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Simpson Manufacturing and Linamar

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

The idea behind Simpson Manufacturing and Linamar 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.