Correlation Between Interface and Caesarstone

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

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

Diversification Opportunities for Interface and Caesarstone

-0.71

Correlation Coefficient

Interface  Caesarstone

Pay attention - limited upside

The 3 months correlation between Interface and Caesarstone is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Interface and Caesarstone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caesarstone and Interface 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 Interface are associated (or correlated) with Caesarstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caesarstone has no effect on the direction of Interface i.e., Interface and Caesarstone go up and down completely randomly.

Pair Corralation between Interface and Caesarstone

Given the investment horizon of 90 days Interface is expected to generate 0.39 times more return on investment than Caesarstone. However, Interface is 2.58 times less risky than Caesarstone. It trades about 0.09 of its potential returns per unit of risk. Caesarstone is currently generating about -0.11 per unit of risk. If you would invest  1,898  in Interface on April 29, 2025 and sell it today you would earn a total of  192.00  from holding Interface or generate 10.12% return on investment over 90 days.

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

Interface  vs.  Caesarstone

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.

Caesarstone

Risk-Adjusted Performance

Very Weak

Over the last 90 days Caesarstone has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Interface and Caesarstone

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

The idea behind Interface and Caesarstone 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.