Correlation Between Crane and Quad Graphics
Can any of the company-specific risk be diversified away by investing in both Crane and Quad Graphics 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 Quad Graphics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Company and Quad Graphics, you can compare the effects of market volatilities on Crane and Quad Graphics 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 Quad Graphics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and Quad Graphics.
Diversification Opportunities for Crane and Quad Graphics
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Crane and Quad is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and Quad Graphics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quad Graphics 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 Quad Graphics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quad Graphics has no effect on the direction of Crane i.e., Crane and Quad Graphics go up and down completely randomly.
Pair Corralation between Crane and Quad Graphics
Allowing for the 90-day total investment horizon Crane is expected to generate 1.75 times less return on investment than Quad Graphics. But when comparing it to its historical volatility, Crane Company is 2.42 times less risky than Quad Graphics. It trades about 0.45 of its potential returns per unit of risk. Quad Graphics is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 520.00 in Quad Graphics on August 28, 2024 and sell it today you would earn a total of 197.00 from holding Quad Graphics or generate 37.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crane Company vs. Quad Graphics
Performance |
| Timeline |
| Crane Company |
| Quad Graphics |
Crane and Quad Graphics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crane and Quad Graphics
The main advantage of trading using opposite Crane and Quad Graphics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane position performs unexpectedly, Quad Graphics 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 Quad Graphics will offset losses from the drop in Quad Graphics' long position.| Crane vs. Aquagold International | Crane vs. Morningstar Unconstrained Allocation | Crane vs. High Yield Municipal Fund | Crane vs. Thrivent High Yield |
| Quad Graphics vs. Maximus | Quad Graphics vs. CBIZ Inc | Quad Graphics vs. First Advantage Corp | Quad Graphics vs. Network 1 Technologies |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |