Correlation Between Standex International and Interface

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

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

Diversification Opportunities for Standex International and Interface

0.59

Correlation Coefficient

Standex International  Interface

Very weak diversification

The 3 months correlation between Standex and Interface is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Standex International and Interface in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interface and Standex International 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 Standex International are associated (or correlated) with Interface. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interface has no effect on the direction of Standex International i.e., Standex International and Interface go up and down completely randomly.

Pair Corralation between Standex International and Interface

Considering the 90-day investment horizon Standex International is expected to generate 1.14 times more return on investment than Interface. However, Standex International is 1.14 times more volatile than Interface. It trades about 0.13 of its potential returns per unit of risk. Interface is currently generating about 0.09 per unit of risk. If you would invest  14,206  in Standex International on April 29, 2025 and sell it today you would earn a total of  2,436  from holding Standex International or generate 17.15% return on investment over 90 days.

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

Standex International  vs.  Interface

Standex International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Standex International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Standex International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Interface

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Interface are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, Interface may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Standex International and Interface

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

The idea behind Standex International and Interface 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..