Correlation Between CSX and Illinois Tool
Can any of the company-specific risk be diversified away by investing in both CSX and Illinois Tool 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 CSX and Illinois Tool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSX Corporation and Illinois Tool Works, you can compare the effects of market volatilities on CSX and Illinois Tool 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 CSX with a short position of Illinois Tool. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSX and Illinois Tool.
Diversification Opportunities for CSX and Illinois Tool
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CSX and Illinois is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding CSX Corp. and Illinois Tool Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Illinois Tool Works and CSX 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 CSX Corporation are associated (or correlated) with Illinois Tool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Illinois Tool Works has no effect on the direction of CSX i.e., CSX and Illinois Tool go up and down completely randomly.
Pair Corralation between CSX and Illinois Tool
Considering the 90-day investment horizon CSX Corporation is expected to generate 1.15 times more return on investment than Illinois Tool. However, CSX is 1.15 times more volatile than Illinois Tool Works. It trades about 0.17 of its potential returns per unit of risk. Illinois Tool Works is currently generating about -0.04 per unit of risk. If you would invest 3,235 in CSX Corporation on September 12, 2025 and sell it today you would earn a total of 474.00 from holding CSX Corporation or generate 14.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSX Corp. vs. Illinois Tool Works
Performance |
| Timeline |
| CSX Corporation |
| Illinois Tool Works |
CSX and Illinois Tool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSX and Illinois Tool
The main advantage of trading using opposite CSX and Illinois Tool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSX position performs unexpectedly, Illinois Tool 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 Illinois Tool will offset losses from the drop in Illinois Tool's long position.| CSX vs. Norfolk Southern | CSX vs. Canadian Pacific Railway | CSX vs. Canadian National Railway | CSX vs. Illinois Tool Works |
| Illinois Tool vs. Emerson Electric | Illinois Tool vs. Cummins | Illinois Tool vs. Howmet Aerospace | Illinois Tool vs. CSX Corporation |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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