Correlation Between Crane and Acco Brands
Can any of the company-specific risk be diversified away by investing in both Crane and Acco Brands 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 Crane and Acco Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Company and Acco Brands, you can compare the effects of market volatilities on Crane and Acco Brands 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 Crane with a short position of Acco Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and Acco Brands.
Diversification Opportunities for Crane and Acco Brands
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crane and Acco is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and Crane 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 Crane Company are associated (or correlated) with Acco Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acco Brands has no effect on the direction of Crane i.e., Crane and Acco Brands go up and down completely randomly.
Pair Corralation between Crane and Acco Brands
Allowing for the 90-day total investment horizon Crane Company is expected to generate 2.04 times more return on investment than Acco Brands. However, Crane is 2.04 times more volatile than Acco Brands. It trades about 0.2 of its potential returns per unit of risk. Acco Brands is currently generating about 0.0 per unit of risk. If you would invest 15,366 in Crane Company on November 9, 2024 and sell it today you would earn a total of 1,913 from holding Crane Company or generate 12.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crane Company vs. Acco Brands
Performance |
| Timeline |
| Crane Company |
| Acco Brands |
Crane and Acco Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crane and Acco Brands
The main advantage of trading using opposite Crane and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane position performs unexpectedly, Acco Brands 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 Acco Brands will offset losses from the drop in Acco Brands' long position.| Crane vs. Standex International | Crane vs. Donaldson | Crane vs. CSW Industrials | Crane vs. Franklin Electric Co |
| Acco Brands vs. HNI Corp | Acco Brands vs. Steelcase | Acco Brands vs. Ennis Inc | Acco Brands vs. Acacia Research |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |