Correlation Between Distribution Solutions and Global Industrial
Can any of the company-specific risk be diversified away by investing in both Distribution Solutions and Global Industrial 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 Distribution Solutions and Global Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Distribution Solutions Group and Global Industrial Co, you can compare the effects of market volatilities on Distribution Solutions and Global Industrial 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 Distribution Solutions with a short position of Global Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Distribution Solutions and Global Industrial.
Diversification Opportunities for Distribution Solutions and Global Industrial
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Distribution and Global is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Distribution Solutions Group and Global Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Industrial and Distribution Solutions 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 Distribution Solutions Group are associated (or correlated) with Global Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Industrial has no effect on the direction of Distribution Solutions i.e., Distribution Solutions and Global Industrial go up and down completely randomly.
Pair Corralation between Distribution Solutions and Global Industrial
Given the investment horizon of 90 days Distribution Solutions is expected to generate 2.12 times less return on investment than Global Industrial. But when comparing it to its historical volatility, Distribution Solutions Group is 1.88 times less risky than Global Industrial. It trades about 0.15 of its potential returns per unit of risk. Global Industrial Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,611 in Global Industrial Co on May 28, 2025 and sell it today you would earn a total of 1,099 from holding Global Industrial Co or generate 42.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
Distribution Solutions Group vs. Global Industrial Co
Performance |
| Timeline |
| Distribution Solutions |
| Global Industrial |
Distribution Solutions and Global Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Distribution Solutions and Global Industrial
The main advantage of trading using opposite Distribution Solutions and Global Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Distribution Solutions position performs unexpectedly, Global Industrial 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 Global Industrial will offset losses from the drop in Global Industrial's long position.| Distribution Solutions vs. Global Industrial Co | Distribution Solutions vs. Core Main | Distribution Solutions vs. Applied Industrial Technologies | Distribution Solutions vs. BlueLinx Holdings |
| Global Industrial vs. BlueLinx Holdings | Global Industrial vs. Core Main | Global Industrial vs. PC Connection | Global Industrial vs. Distribution Solutions Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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