Correlation Between Crane and ATS
Can any of the company-specific risk be diversified away by investing in both Crane and ATS 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 ATS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Company and ATS Corporation, you can compare the effects of market volatilities on Crane and ATS 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 ATS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and ATS.
Diversification Opportunities for Crane and ATS
Very weak diversification
The 3 months correlation between Crane and ATS is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and ATS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATS Corporation 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 ATS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATS Corporation has no effect on the direction of Crane i.e., Crane and ATS go up and down completely randomly.
Pair Corralation between Crane and ATS
Allowing for the 90-day total investment horizon Crane Company is expected to generate 0.59 times more return on investment than ATS. However, Crane Company is 1.7 times less risky than ATS. It trades about 0.39 of its potential returns per unit of risk. ATS Corporation is currently generating about 0.15 per unit of risk. If you would invest 15,710 in Crane Company on September 1, 2024 and sell it today you would earn a total of 2,498 from holding Crane Company or generate 15.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crane Company vs. ATS Corp.
Performance |
| Timeline |
| Crane Company |
| ATS Corporation |
Crane and ATS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crane and ATS
The main advantage of trading using opposite Crane and ATS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane position performs unexpectedly, ATS 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 ATS will offset losses from the drop in ATS's long position.| Crane vs. Standex International | Crane vs. Donaldson | Crane vs. CSW Industrials | Crane vs. Franklin Electric Co |
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 Stocks Directory module to find actively traded stocks across global markets.
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