Correlation Between Corning Incorporated and Quanex Building

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

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

Diversification Opportunities for Corning Incorporated and Quanex Building

0.21

Correlation Coefficient

Corning Incorporated  Quanex Building

Modest diversification

The 3 months correlation between Corning and Quanex is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Corning Incorporated and Quanex Building Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanex Building Products and Corning Incorporated 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 Corning Incorporated are associated (or correlated) with Quanex Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quanex Building Products has no effect on the direction of Corning Incorporated i.e., Corning Incorporated and Quanex Building go up and down completely randomly.

Pair Corralation between Corning Incorporated and Quanex Building

Considering the 90-day investment horizon Corning Incorporated is expected to generate 0.61 times more return on investment than Quanex Building. However, Corning Incorporated is 1.63 times less risky than Quanex Building. It trades about 0.07 of its potential returns per unit of risk. Quanex Building Products is currently generating about 0.0 per unit of risk. If you would invest  3,392  in Corning Incorporated on October 4, 2024 and sell it today you would earn a total of  1,360  from holding Corning Incorporated or generate 40.09% return on investment over 90 days.

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

Corning Incorporated  vs.  Quanex Building Products

Corning Incorporated

Risk-Adjusted Performance

6 of 100

Modest

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

Quanex Building Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quanex Building Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Corning Incorporated and Quanex Building

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

The idea behind Corning Incorporated and Quanex Building Products 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 Commodity Directory module to find actively traded commodities issued by global exchanges.