Correlation Between CVD Equipment and Standex International
Can any of the company-specific risk be diversified away by investing in both CVD Equipment and Standex 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 CVD Equipment and Standex International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVD Equipment and Standex International, you can compare the effects of market volatilities on CVD Equipment and Standex 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 CVD Equipment with a short position of Standex International. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVD Equipment and Standex International.
Diversification Opportunities for CVD Equipment and Standex International
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CVD and Standex is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding CVD Equipment and Standex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standex International and CVD Equipment 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 CVD Equipment are associated (or correlated) with Standex International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standex International has no effect on the direction of CVD Equipment i.e., CVD Equipment and Standex International go up and down completely randomly.
Pair Corralation between CVD Equipment and Standex International
Considering the 90-day investment horizon CVD Equipment is expected to generate 2.09 times more return on investment than Standex International. However, CVD Equipment is 2.09 times more volatile than Standex International. It trades about -0.01 of its potential returns per unit of risk. Standex International is currently generating about -0.03 per unit of risk. If you would invest 378.00 in CVD Equipment on November 18, 2024 and sell it today you would lose (7.00) from holding CVD Equipment or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVD Equipment vs. Standex International
Performance |
| Timeline |
| CVD Equipment |
| Standex International |
CVD Equipment and Standex International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVD Equipment and Standex International
The main advantage of trading using opposite CVD Equipment and Standex International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVD Equipment position performs unexpectedly, Standex 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 Standex International will offset losses from the drop in Standex International's long position.| CVD Equipment vs. Standex International | CVD Equipment vs. Intevac | CVD Equipment vs. Thermon Group Holdings | CVD Equipment vs. Enpro Industries |
| Standex International vs. Gorman Rupp | Standex International vs. Franklin Electric Co | Standex International vs. Omega Flex | Standex International vs. China Yuchai International |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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