Correlation Between Ametek and CIRCOR International
Can any of the company-specific risk be diversified away by investing in both Ametek and CIRCOR International 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 Ametek and CIRCOR International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ametek Inc and CIRCOR International, you can compare the effects of market volatilities on Ametek and CIRCOR International 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 Ametek with a short position of CIRCOR International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ametek and CIRCOR International.
Diversification Opportunities for Ametek and CIRCOR International
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ametek and CIRCOR is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ametek Inc and CIRCOR International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIRCOR International and Ametek 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 Ametek Inc are associated (or correlated) with CIRCOR International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIRCOR International has no effect on the direction of Ametek i.e., Ametek and CIRCOR International go up and down completely randomly.
Pair Corralation between Ametek and CIRCOR International
If you would invest 16,667 in Ametek Inc on August 24, 2024 and sell it today you would earn a total of 2,909 from holding Ametek Inc or generate 17.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Ametek Inc vs. CIRCOR International
Performance |
| Timeline |
| Ametek Inc |
| CIRCOR International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ametek and CIRCOR International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ametek and CIRCOR International
The main advantage of trading using opposite Ametek and CIRCOR International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ametek position performs unexpectedly, CIRCOR International 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 CIRCOR International will offset losses from the drop in CIRCOR International's long position.The idea behind Ametek Inc and CIRCOR International 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.| CIRCOR International vs. Helios Technologies | CIRCOR International vs. Enpro Industries | CIRCOR International vs. Omega Flex | CIRCOR International vs. Luxfer 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |