Correlation Between Crane and Titan International
Can any of the company-specific risk be diversified away by investing in both Crane and Titan International 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 Titan International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Company and Titan International, you can compare the effects of market volatilities on Crane and Titan International 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 Titan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and Titan International.
Diversification Opportunities for Crane and Titan International
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crane and Titan is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and Titan International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan International 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 Titan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan International has no effect on the direction of Crane i.e., Crane and Titan International go up and down completely randomly.
Pair Corralation between Crane and Titan International
Allowing for the 90-day total investment horizon Crane Company is expected to generate 0.84 times more return on investment than Titan International. However, Crane Company is 1.18 times less risky than Titan International. It trades about 0.06 of its potential returns per unit of risk. Titan International is currently generating about -0.03 per unit of risk. If you would invest 10,076 in Crane Company on August 27, 2024 and sell it today you would earn a total of 8,360 from holding Crane Company or generate 82.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crane Company vs. Titan International
Performance |
| Timeline |
| Crane Company |
| Titan International |
Crane and Titan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crane and Titan International
The main advantage of trading using opposite Crane and Titan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane position performs unexpectedly, Titan International 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 Titan International will offset losses from the drop in Titan International's long position.| Crane vs. Standex International | Crane vs. Donaldson | Crane vs. CSW Industrials | Crane vs. Franklin Electric Co |
| Titan International vs. Shyft Group | Titan International vs. Manitowoc | Titan International vs. Oshkosh | Titan International vs. Terex |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |