Correlation Between CSW Industrials and Intevac

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

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

Diversification Opportunities for CSW Industrials and Intevac

-0.81

Correlation Coefficient

CSW Industrials  Intevac

Pay attention - limited upside

The 3 months correlation between CSW and Intevac is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding CSW Industrials and Intevac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intevac and CSW Industrials 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 CSW Industrials are associated (or correlated) with Intevac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intevac has no effect on the direction of CSW Industrials i.e., CSW Industrials and Intevac go up and down completely randomly.

Pair Corralation between CSW Industrials and Intevac

Given the investment horizon of 90 days CSW Industrials is expected to under-perform the Intevac. But the stock apears to be less risky and, when comparing its historical volatility, CSW Industrials is 1.56 times less risky than Intevac. The stock trades about -0.15 of its potential returns per unit of risk. The Intevac is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  342.00  in Intevac on December 27, 2024 and sell it today you would earn a total of  57.00  from holding Intevac or generate 16.67% return on investment over 90 days.

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

CSW Industrials  vs.  Intevac

CSW Industrials

Risk-Adjusted Performance

Very Weak

Over the last 90 days CSW Industrials has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Intevac

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intevac are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Intevac exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSW Industrials and Intevac

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

The idea behind CSW Industrials and Intevac 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.