Correlation Between Crane and Lion Electric
Can any of the company-specific risk be diversified away by investing in both Crane and Lion Electric 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 Lion Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Company and Lion Electric Corp, you can compare the effects of market volatilities on Crane and Lion Electric 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 Lion Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and Lion Electric.
Diversification Opportunities for Crane and Lion Electric
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Crane and Lion is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and Lion Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Electric 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 Lion Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Electric Corp has no effect on the direction of Crane i.e., Crane and Lion Electric go up and down completely randomly.
Pair Corralation between Crane and Lion Electric
Allowing for the 90-day total investment horizon Crane Company is expected to generate 0.32 times more return on investment than Lion Electric. However, Crane Company is 3.16 times less risky than Lion Electric. It trades about 0.1 of its potential returns per unit of risk. Lion Electric Corp is currently generating about -0.14 per unit of risk. If you would invest 14,490 in Crane Company on August 24, 2024 and sell it today you would earn a total of 3,826 from holding Crane Company or generate 26.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crane Company vs. Lion Electric Corp
Performance |
| Timeline |
| Crane Company |
| Lion Electric Corp |
Crane and Lion Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crane and Lion Electric
The main advantage of trading using opposite Crane and Lion Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane position performs unexpectedly, Lion Electric 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 Lion Electric will offset losses from the drop in Lion Electric's long position.| Crane vs. Standex International | Crane vs. Donaldson | Crane vs. CSW Industrials | Crane vs. Franklin Electric Co |
| Lion Electric vs. Xos Inc | Lion Electric vs. Nikola Corp | Lion Electric vs. Wabash National | Lion Electric vs. American Premium Water |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |