Correlation Between CarsalesCom and Fastenal

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

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

Diversification Opportunities for CarsalesCom and Fastenal

0.77

Correlation Coefficient

CarsalesCom  Fastenal

Poor diversification

The 3 months correlation between CarsalesCom and Fastenal is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom and Fastenal Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastenal and CarsalesCom 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 CarsalesCom 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 CarsalesCom i.e., CarsalesCom and Fastenal go up and down completely randomly.

Pair Corralation between CarsalesCom and Fastenal

Assuming the 90 days horizon CarsalesCom is expected to generate 0.72 times more return on investment than Fastenal. However, CarsalesCom is 1.39 times less risky than Fastenal. It trades about -0.26 of its potential returns per unit of risk. Fastenal Company is currently generating about -0.19 per unit of risk. If you would invest  2,197  in CarsalesCom on June 28, 2025 and sell it today you would lose (117.00) from holding CarsalesCom or give up 5.33% of portfolio value over 90 days.

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

CarsalesCom  vs.  Fastenal Company

CarsalesCom

Risk-Adjusted Performance

Weakest

Over the last 90 days CarsalesCom has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CarsalesCom is not utilizing all of its potentials. The newest 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 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Fastenal reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CarsalesCom and Fastenal

The main advantage of trading using opposite CarsalesCom and Fastenal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CarsalesCom 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 CarsalesCom 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.