Correlation Between CIRCOR International and Hurco Companies
Can any of the company-specific risk be diversified away by investing in both CIRCOR International and Hurco Companies 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 Hurco Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIRCOR International and Hurco Companies, you can compare the effects of market volatilities on CIRCOR International and Hurco Companies 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 Hurco Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIRCOR International and Hurco Companies.
Diversification Opportunities for CIRCOR International and Hurco Companies
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CIRCOR and Hurco is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding CIRCOR International and Hurco Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hurco Companies 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 Hurco Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hurco Companies has no effect on the direction of CIRCOR International i.e., CIRCOR International and Hurco Companies go up and down completely randomly.
Pair Corralation between CIRCOR International and Hurco Companies
Considering the 90-day investment horizon CIRCOR International is expected to generate 2.15 times more return on investment than Hurco Companies. However, CIRCOR International is 2.15 times more volatile than Hurco Companies. It trades about 0.11 of its potential returns per unit of risk. Hurco Companies is currently generating about 0.01 per unit of risk. If you would invest 2,705 in CIRCOR International on August 24, 2024 and sell it today you would earn a total of 2,880 from holding CIRCOR International or generate 106.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 32.06% |
| Values | Daily Returns |
CIRCOR International vs. Hurco Companies
Performance |
| Timeline |
| CIRCOR International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hurco Companies |
CIRCOR International and Hurco Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIRCOR International and Hurco Companies
The main advantage of trading using opposite CIRCOR International and Hurco Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIRCOR International position performs unexpectedly, Hurco Companies 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 Hurco Companies will offset losses from the drop in Hurco Companies' long position.| CIRCOR International vs. Helios Technologies | CIRCOR International vs. Enpro Industries | CIRCOR International vs. Omega Flex | CIRCOR International vs. Luxfer Holdings PLC |
| Hurco Companies vs. Enerpac Tool Group | Hurco Companies vs. Enpro Industries | Hurco Companies vs. Omega Flex | Hurco Companies vs. Gorman Rupp |
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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