Correlation Between FutureFuel Corp and Core Molding

Can any of the company-specific risk be diversified away by investing in both FutureFuel Corp and Core Molding 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 FutureFuel Corp and Core Molding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FutureFuel Corp and Core Molding Technologies, you can compare the effects of market volatilities on FutureFuel Corp and Core Molding 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 FutureFuel Corp with a short position of Core Molding. Check out your portfolio center. Please also check ongoing floating volatility patterns of FutureFuel Corp and Core Molding.

Diversification Opportunities for FutureFuel Corp and Core Molding

0.29

Correlation Coefficient

FutureFuel Corp  Core Molding

Modest diversification

The 3 months correlation between FutureFuel and Core is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding FutureFuel Corp and Core Molding Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Molding Technologies and FutureFuel Corp 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 FutureFuel Corp are associated (or correlated) with Core Molding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Molding Technologies has no effect on the direction of FutureFuel Corp i.e., FutureFuel Corp and Core Molding go up and down completely randomly.

Pair Corralation between FutureFuel Corp and Core Molding

Allowing for the 90-day total investment horizon FutureFuel Corp is expected to under-perform the Core Molding. In addition to that, FutureFuel Corp is 1.34 times more volatile than Core Molding Technologies. It trades about -0.03 of its total potential returns per unit of risk. Core Molding Technologies is currently generating about 0.08 per unit of volatility. If you would invest  1,720  in Core Molding Technologies on August 13, 2025 and sell it today you would earn a total of  177.00  from holding Core Molding Technologies or generate 10.29% return on investment over 90 days.

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

FutureFuel Corp  vs.  Core Molding Technologies

FutureFuel Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days FutureFuel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, FutureFuel Corp is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Core Molding Technologies

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Core Molding Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady primary indicators, Core Molding may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with FutureFuel Corp and Core Molding

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

The idea behind FutureFuel Corp and Core Molding Technologies 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.