Correlation Between CIRCOR International and Donaldson
Can any of the company-specific risk be diversified away by investing in both CIRCOR International and Donaldson 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 CIRCOR International and Donaldson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIRCOR International and Donaldson, you can compare the effects of market volatilities on CIRCOR International and Donaldson 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 CIRCOR International with a short position of Donaldson. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIRCOR International and Donaldson.
Diversification Opportunities for CIRCOR International and Donaldson
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CIRCOR and Donaldson is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding CIRCOR International and Donaldson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Donaldson and CIRCOR International 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 CIRCOR International are associated (or correlated) with Donaldson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Donaldson has no effect on the direction of CIRCOR International i.e., CIRCOR International and Donaldson go up and down completely randomly.
Pair Corralation between CIRCOR International and Donaldson
If you would invest 7,391 in Donaldson on August 24, 2024 and sell it today you would earn a total of 210.00 from holding Donaldson or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
CIRCOR International vs. Donaldson
Performance |
| Timeline |
| CIRCOR International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Donaldson |
CIRCOR International and Donaldson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIRCOR International and Donaldson
The main advantage of trading using opposite CIRCOR International and Donaldson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIRCOR International position performs unexpectedly, Donaldson 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 Donaldson will offset losses from the drop in Donaldson's long position.| CIRCOR International vs. Helios Technologies | CIRCOR International vs. Enpro Industries | CIRCOR International vs. Omega Flex | CIRCOR International vs. Luxfer Holdings PLC |
| Donaldson vs. IDEX Corporation | Donaldson vs. Watts Water Technologies | Donaldson vs. Gorman Rupp | Donaldson vs. Enerpac Tool Group |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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