Correlation Between Crane and Enovis Corp
Can any of the company-specific risk be diversified away by investing in both Crane and Enovis Corp 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 Enovis Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Company and Enovis Corp, you can compare the effects of market volatilities on Crane and Enovis Corp 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 Enovis Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and Enovis Corp.
Diversification Opportunities for Crane and Enovis Corp
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crane and Enovis is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and Enovis Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enovis Corp 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 Enovis Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enovis Corp has no effect on the direction of Crane i.e., Crane and Enovis Corp go up and down completely randomly.
Pair Corralation between Crane and Enovis Corp
Allowing for the 90-day total investment horizon Crane is expected to generate 1.19 times less return on investment than Enovis Corp. But when comparing it to its historical volatility, Crane Company is 1.3 times less risky than Enovis Corp. It trades about 0.35 of its potential returns per unit of risk. Enovis Corp is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 4,051 in Enovis Corp on August 30, 2024 and sell it today you would earn a total of 794.00 from holding Enovis Corp or generate 19.6% 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. Enovis Corp
Performance |
| Timeline |
| Crane Company |
| Enovis Corp |
Crane and Enovis Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crane and Enovis Corp
The main advantage of trading using opposite Crane and Enovis Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane position performs unexpectedly, Enovis Corp 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 Enovis Corp will offset losses from the drop in Enovis Corp's long position.| Crane vs. Standex International | Crane vs. Donaldson | Crane vs. CSW Industrials | Crane vs. Franklin Electric Co |
| Enovis Corp vs. Helios Technologies | Enovis Corp vs. Enpro Industries | Enovis Corp vs. Omega Flex | Enovis Corp vs. Luxfer Holdings PLC |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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