Correlation Between Crane and Schneider National
Can any of the company-specific risk be diversified away by investing in both Crane and Schneider National 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 Schneider National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Company and Schneider National, you can compare the effects of market volatilities on Crane and Schneider National 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 Schneider National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and Schneider National.
Diversification Opportunities for Crane and Schneider National
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Crane and Schneider is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and Schneider National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider National 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 Schneider National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schneider National has no effect on the direction of Crane i.e., Crane and Schneider National go up and down completely randomly.
Pair Corralation between Crane and Schneider National
Allowing for the 90-day total investment horizon Crane is expected to generate 1.45 times less return on investment than Schneider National. In addition to that, Crane is 1.34 times more volatile than Schneider National. It trades about 0.1 of its total potential returns per unit of risk. Schneider National is currently generating about 0.19 per unit of volatility. If you would invest 2,184 in Schneider National on August 24, 2024 and sell it today you would earn a total of 957.00 from holding Schneider National or generate 43.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crane Company vs. Schneider National
Performance |
| Timeline |
| Crane Company |
| Schneider National |
Crane and Schneider National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crane and Schneider National
The main advantage of trading using opposite Crane and Schneider National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane position performs unexpectedly, Schneider National 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 Schneider National will offset losses from the drop in Schneider National's long position.| Crane vs. Standex International | Crane vs. Donaldson | Crane vs. CSW Industrials | Crane vs. Franklin Electric Co |
| Schneider National vs. Small Cap Core | Schneider National vs. Morningstar Unconstrained Allocation | Schneider National vs. Mutual Of America | Schneider National vs. Ep Emerging Markets |
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.
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