Correlation Between Crane and QEP
Can any of the company-specific risk be diversified away by investing in both Crane and QEP 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 QEP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Company and QEP Co Inc, you can compare the effects of market volatilities on Crane and QEP 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 QEP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and QEP.
Diversification Opportunities for Crane and QEP
Very good diversification
The 3 months correlation between Crane and QEP is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and QEP Co Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QEP Co Inc 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 QEP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QEP Co Inc has no effect on the direction of Crane i.e., Crane and QEP go up and down completely randomly.
Pair Corralation between Crane and QEP
If you would invest 15,239 in Crane Company on August 28, 2024 and sell it today you would earn a total of 3,241 from holding Crane Company or generate 21.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Crane Company vs. QEP Co Inc
Performance |
| Timeline |
| Crane Company |
| QEP Co Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Crane and QEP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crane and QEP
The main advantage of trading using opposite Crane and QEP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane position performs unexpectedly, QEP 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 QEP will offset losses from the drop in QEP'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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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