Correlation Between CIRCOR International and Tennant
Can any of the company-specific risk be diversified away by investing in both CIRCOR International and Tennant 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 Tennant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIRCOR International and Tennant Company, you can compare the effects of market volatilities on CIRCOR International and Tennant 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 Tennant. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIRCOR International and Tennant.
Diversification Opportunities for CIRCOR International and Tennant
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CIRCOR and Tennant is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding CIRCOR International and Tennant Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tennant Company 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 Tennant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tennant Company has no effect on the direction of CIRCOR International i.e., CIRCOR International and Tennant go up and down completely randomly.
Pair Corralation between CIRCOR International and Tennant
Considering the 90-day investment horizon CIRCOR International is expected to generate 2.79 times more return on investment than Tennant. However, CIRCOR International is 2.79 times more volatile than Tennant Company. It trades about 0.12 of its potential returns per unit of risk. Tennant Company is currently generating about 0.05 per unit of risk. If you would invest 2,653 in CIRCOR International on August 28, 2024 and sell it today you would earn a total of 2,932 from holding CIRCOR International or generate 110.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.72% |
| Values | Daily Returns |
CIRCOR International vs. Tennant Company
Performance |
| Timeline |
| CIRCOR International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tennant Company |
CIRCOR International and Tennant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIRCOR International and Tennant
The main advantage of trading using opposite CIRCOR International and Tennant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIRCOR International position performs unexpectedly, Tennant 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 Tennant will offset losses from the drop in Tennant's long position.| CIRCOR International vs. Helios Technologies | CIRCOR International vs. Enpro Industries | CIRCOR International vs. Omega Flex | CIRCOR International vs. Luxfer Holdings PLC |
| Tennant vs. Aquagold International | Tennant vs. Morningstar Unconstrained Allocation | Tennant vs. High Yield Municipal Fund | Tennant vs. Thrivent High Yield |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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