Correlation Between Zurn Elkay and ESAB Corp
Can any of the company-specific risk be diversified away by investing in both Zurn Elkay and ESAB Corp 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 Zurn Elkay and ESAB Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zurn Elkay Water and ESAB Corp, you can compare the effects of market volatilities on Zurn Elkay and ESAB Corp 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 Zurn Elkay with a short position of ESAB Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurn Elkay and ESAB Corp.
Diversification Opportunities for Zurn Elkay and ESAB Corp
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zurn and ESAB is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Zurn Elkay Water and ESAB Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESAB Corp and Zurn Elkay 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 Zurn Elkay Water are associated (or correlated) with ESAB Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESAB Corp has no effect on the direction of Zurn Elkay i.e., Zurn Elkay and ESAB Corp go up and down completely randomly.
Pair Corralation between Zurn Elkay and ESAB Corp
Considering the 90-day investment horizon Zurn Elkay Water is expected to generate 0.8 times more return on investment than ESAB Corp. However, Zurn Elkay Water is 1.26 times less risky than ESAB Corp. It trades about -0.01 of its potential returns per unit of risk. ESAB Corp is currently generating about -0.09 per unit of risk. If you would invest 4,617 in Zurn Elkay Water on August 22, 2025 and sell it today you would lose (72.00) from holding Zurn Elkay Water or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurn Elkay Water vs. ESAB Corp
Performance |
| Timeline |
| Zurn Elkay Water |
| ESAB Corp |
Zurn Elkay and ESAB Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurn Elkay and ESAB Corp
The main advantage of trading using opposite Zurn Elkay and ESAB Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurn Elkay position performs unexpectedly, ESAB Corp 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 ESAB Corp will offset losses from the drop in ESAB Corp's long position.| Zurn Elkay vs. Federal Signal | Zurn Elkay vs. IES Holdings | Zurn Elkay vs. Primoris Services | Zurn Elkay vs. Valmont Industries |
| ESAB Corp vs. Toro Co | ESAB Corp vs. Federal Signal | ESAB Corp vs. Simpson Manufacturing | ESAB Corp vs. Ryanair Holdings PLC |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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