Correlation Between MSA Safety and Gates Industrial

Can any of the company-specific risk be diversified away by investing in both MSA Safety and Gates 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 MSA Safety and Gates Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MSA Safety and Gates Industrial, you can compare the effects of market volatilities on MSA Safety and Gates 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 MSA Safety with a short position of Gates Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSA Safety and Gates Industrial.

Diversification Opportunities for MSA Safety and Gates Industrial

0.85

Correlation Coefficient

MSA Safety  Gates Industrial

Very poor diversification

The 3 months correlation between MSA and Gates is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding MSA Safety and Gates Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gates Industrial and MSA Safety 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 MSA Safety are associated (or correlated) with Gates Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gates Industrial has no effect on the direction of MSA Safety i.e., MSA Safety and Gates Industrial go up and down completely randomly.

Pair Corralation between MSA Safety and Gates Industrial

Considering the 90-day investment horizon MSA Safety is expected to generate 0.65 times more return on investment than Gates Industrial. However, MSA Safety is 1.54 times less risky than Gates Industrial. It trades about -0.09 of its potential returns per unit of risk. Gates Industrial is currently generating about -0.1 per unit of risk. If you would invest  17,205  in MSA Safety on August 24, 2025 and sell it today you would lose (1,620) from holding MSA Safety or give up 9.42% of portfolio value over 90 days.

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

MSA Safety  vs.  Gates Industrial

MSA Safety

Risk-Adjusted Performance

Weakest

Over the last 90 days MSA Safety has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Gates Industrial

Risk-Adjusted Performance

Weakest

Over the last 90 days Gates Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in December 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with MSA Safety and Gates Industrial

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

The idea behind MSA Safety and Gates Industrial 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.