Correlation Between Crane and Hurco Companies
Can any of the company-specific risk be diversified away by investing in both Crane and Hurco Companies 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 Hurco Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Company and Hurco Companies, you can compare the effects of market volatilities on Crane and Hurco Companies 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 Hurco Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and Hurco Companies.
Diversification Opportunities for Crane and Hurco Companies
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crane and Hurco is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and Hurco Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hurco Companies 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 Hurco Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hurco Companies has no effect on the direction of Crane i.e., Crane and Hurco Companies go up and down completely randomly.
Pair Corralation between Crane and Hurco Companies
Allowing for the 90-day total investment horizon Crane Company is expected to generate 0.84 times more return on investment than Hurco Companies. However, Crane Company is 1.19 times less risky than Hurco Companies. It trades about 0.1 of its potential returns per unit of risk. Hurco Companies is currently generating about 0.06 per unit of risk. If you would invest 14,490 in Crane Company on August 23, 2024 and sell it today you would earn a total of 3,747 from holding Crane Company or generate 25.86% 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. Hurco Companies
Performance |
| Timeline |
| Crane Company |
| Hurco Companies |
Crane and Hurco Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crane and Hurco Companies
The main advantage of trading using opposite Crane and Hurco Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane position performs unexpectedly, Hurco Companies 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 Hurco Companies will offset losses from the drop in Hurco Companies' long position.| Crane vs. Standex International | Crane vs. Donaldson | Crane vs. CSW Industrials | Crane vs. Franklin Electric Co |
| Hurco Companies vs. Enerpac Tool Group | Hurco Companies vs. Enpro Industries | Hurco Companies vs. Omega Flex | Hurco Companies vs. Gorman Rupp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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