Correlation Between Sturm Ruger and Quanex Building

Can any of the company-specific risk be diversified away by investing in both Sturm Ruger and Quanex Building 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 Sturm Ruger and Quanex Building into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sturm Ruger and Quanex Building Products, you can compare the effects of market volatilities on Sturm Ruger and Quanex Building 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 Sturm Ruger with a short position of Quanex Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sturm Ruger and Quanex Building.

Diversification Opportunities for Sturm Ruger and Quanex Building

0.55

Correlation Coefficient

Sturm Ruger  Quanex Building

Very weak diversification

The 3 months correlation between Sturm and Quanex is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sturm Ruger and Quanex Building Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanex Building Products and Sturm Ruger 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 Sturm Ruger are associated (or correlated) with Quanex Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quanex Building Products has no effect on the direction of Sturm Ruger i.e., Sturm Ruger and Quanex Building go up and down completely randomly.

Pair Corralation between Sturm Ruger and Quanex Building

Considering the 90-day investment horizon Sturm Ruger is expected to under-perform the Quanex Building. But the stock apears to be less risky and, when comparing its historical volatility, Sturm Ruger is 1.11 times less risky than Quanex Building. The stock trades about -0.01 of its potential returns per unit of risk. The Quanex Building Products is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,318  in Quanex Building Products on September 10, 2025 and sell it today you would earn a total of  39.00  from holding Quanex Building Products or generate 2.96% return on investment over 90 days.

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

Sturm Ruger  vs.  Quanex Building Products

Sturm Ruger

Risk-Adjusted Performance

Weakest

Over the last 90 days Sturm Ruger has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest inconsistent performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Quanex Building Products

Risk-Adjusted Performance

Weakest

Over the last 90 days Quanex Building Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating 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.

Pair Trading with Sturm Ruger and Quanex Building

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

The idea behind Sturm Ruger and Quanex Building Products 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.