Correlation Between ATS and Crane
Can any of the company-specific risk be diversified away by investing in both ATS and Crane 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 ATS and Crane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATS Corporation and Crane Company, you can compare the effects of market volatilities on ATS and Crane 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 ATS with a short position of Crane. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATS and Crane.
Diversification Opportunities for ATS and Crane
Very weak diversification
The 3 months correlation between ATS and Crane is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ATS Corp. and Crane Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crane Company and ATS 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 ATS Corporation are associated (or correlated) with Crane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crane Company has no effect on the direction of ATS i.e., ATS and Crane go up and down completely randomly.
Pair Corralation between ATS and Crane
Considering the 90-day investment horizon ATS is expected to generate 10.82 times less return on investment than Crane. In addition to that, ATS is 1.1 times more volatile than Crane Company. It trades about 0.01 of its total potential returns per unit of risk. Crane Company is currently generating about 0.09 per unit of volatility. If you would invest 14,697 in Crane Company on September 3, 2024 and sell it today you would earn a total of 3,427 from holding Crane Company or generate 23.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATS Corp. vs. Crane Company
Performance |
| Timeline |
| ATS Corporation |
| Crane Company |
ATS and Crane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATS and Crane
The main advantage of trading using opposite ATS and Crane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATS position performs unexpectedly, Crane 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 Crane will offset losses from the drop in Crane's long position.| ATS vs. Sensient Technologies | ATS vs. CF Industries Holdings | ATS vs. Chemours Co | ATS vs. Asure Software |
| Crane vs. Standex International | Crane vs. Donaldson | Crane vs. CSW Industrials | Crane vs. Franklin Electric Co |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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