Correlation Between Crane and Aquagold International
Can any of the company-specific risk be diversified away by investing in both Crane and Aquagold International 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 Aquagold International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Company and Aquagold International, you can compare the effects of market volatilities on Crane and Aquagold International 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 Aquagold International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and Aquagold International.
Diversification Opportunities for Crane and Aquagold International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Crane and Aquagold is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International 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 Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of Crane i.e., Crane and Aquagold International go up and down completely randomly.
Pair Corralation between Crane and Aquagold International
Allowing for the 90-day total investment horizon Crane Company is expected to generate 0.35 times more return on investment than Aquagold International. However, Crane Company is 2.87 times less risky than Aquagold International. It trades about 0.13 of its potential returns per unit of risk. Aquagold International is currently generating about -0.03 per unit of risk. If you would invest 10,522 in Crane Company on August 26, 2024 and sell it today you would earn a total of 7,914 from holding Crane Company or generate 75.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crane Company vs. Aquagold International
Performance |
| Timeline |
| Crane Company |
| Aquagold International |
Crane and Aquagold International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crane and Aquagold International
The main advantage of trading using opposite Crane and Aquagold International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane position performs unexpectedly, Aquagold International 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 Aquagold International will offset losses from the drop in Aquagold International's long position.| Crane vs. Aquagold International | Crane vs. Morningstar Unconstrained Allocation | Crane vs. High Yield Municipal Fund | Crane vs. Thrivent High Yield |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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