Correlation Between Crawford and Arthur J
Can any of the company-specific risk be diversified away by investing in both Crawford and Arthur J 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 Crawford and Arthur J into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crawford Company and Arthur J Gallagher, you can compare the effects of market volatilities on Crawford and Arthur J 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 Crawford with a short position of Arthur J. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crawford and Arthur J.
Diversification Opportunities for Crawford and Arthur J
Significant diversification
The 3 months correlation between Crawford and Arthur is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Crawford Company and Arthur J Gallagher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arthur J Gallagher and Crawford 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 Crawford Company are associated (or correlated) with Arthur J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arthur J Gallagher has no effect on the direction of Crawford i.e., Crawford and Arthur J go up and down completely randomly.
Pair Corralation between Crawford and Arthur J
Assuming the 90 days horizon Crawford is expected to generate 1.45 times less return on investment than Arthur J. In addition to that, Crawford is 1.82 times more volatile than Arthur J Gallagher. It trades about 0.07 of its total potential returns per unit of risk. Arthur J Gallagher is currently generating about 0.19 per unit of volatility. If you would invest 28,385 in Arthur J Gallagher on November 1, 2024 and sell it today you would earn a total of 1,518 from holding Arthur J Gallagher or generate 5.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crawford Company vs. Arthur J Gallagher
Performance |
| Timeline |
| Crawford |
| Arthur J Gallagher |
Crawford and Arthur J Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crawford and Arthur J
The main advantage of trading using opposite Crawford and Arthur J positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crawford position performs unexpectedly, Arthur J 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 Arthur J will offset losses from the drop in Arthur J's long position.| Crawford vs. CorVel Corp | Crawford vs. Erie Indemnity | Crawford vs. Willis Towers Watson | Crawford vs. Huize Holding |
| Arthur J vs. Aon PLC | Arthur J vs. Brown Brown | Arthur J vs. Willis Towers Watson | Arthur J vs. Erie Indemnity |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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