Correlation Between DXP Enterprises and Pool
Can any of the company-specific risk be diversified away by investing in both DXP Enterprises and Pool 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 DXP Enterprises and Pool into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DXP Enterprises and Pool Corporation, you can compare the effects of market volatilities on DXP Enterprises and Pool 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 DXP Enterprises with a short position of Pool. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXP Enterprises and Pool.
Diversification Opportunities for DXP Enterprises and Pool
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between DXP and Pool is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding DXP Enterprises and Pool Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pool and DXP Enterprises 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 DXP Enterprises are associated (or correlated) with Pool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pool has no effect on the direction of DXP Enterprises i.e., DXP Enterprises and Pool go up and down completely randomly.
Pair Corralation between DXP Enterprises and Pool
Given the investment horizon of 90 days DXP Enterprises is expected to generate 0.89 times more return on investment than Pool. However, DXP Enterprises is 1.12 times less risky than Pool. It trades about -0.2 of its potential returns per unit of risk. Pool Corporation is currently generating about -0.19 per unit of risk. If you would invest 8,718 in DXP Enterprises on March 11, 2025 and sell it today you would lose (511.00) from holding DXP Enterprises or give up 5.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DXP Enterprises vs. Pool Corp.
Performance |
| Timeline |
| DXP Enterprises |
| Pool |
DXP Enterprises and Pool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXP Enterprises and Pool
The main advantage of trading using opposite DXP Enterprises and Pool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXP Enterprises position performs unexpectedly, Pool 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 Pool will offset losses from the drop in Pool's long position.| DXP Enterprises vs. Global Industrial Co | DXP Enterprises vs. EVI Industries | DXP Enterprises vs. Core Main | DXP Enterprises vs. Watsco Inc |
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 Stocks Directory module to find actively traded stocks across global markets.
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