Correlation Between Crane NXT and Ametek
Can any of the company-specific risk be diversified away by investing in both Crane NXT and Ametek 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 NXT and Ametek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane NXT Co and Ametek Inc, you can compare the effects of market volatilities on Crane NXT and Ametek 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 NXT with a short position of Ametek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane NXT and Ametek.
Diversification Opportunities for Crane NXT and Ametek
Significant diversification
The 3 months correlation between Crane and Ametek is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Crane NXT Co and Ametek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ametek Inc and Crane NXT 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 NXT Co are associated (or correlated) with Ametek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ametek Inc has no effect on the direction of Crane NXT i.e., Crane NXT and Ametek go up and down completely randomly.
Pair Corralation between Crane NXT and Ametek
Considering the 90-day investment horizon Crane NXT is expected to generate 1.44 times less return on investment than Ametek. But when comparing it to its historical volatility, Crane NXT Co is 1.2 times less risky than Ametek. It trades about 0.3 of its potential returns per unit of risk. Ametek Inc is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 16,805 in Ametek Inc on August 27, 2024 and sell it today you would earn a total of 2,907 from holding Ametek Inc or generate 17.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crane NXT Co vs. Ametek Inc
Performance |
| Timeline |
| Crane NXT |
| Ametek Inc |
Crane NXT and Ametek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crane NXT and Ametek
The main advantage of trading using opposite Crane NXT and Ametek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane NXT position performs unexpectedly, Ametek 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 Ametek will offset losses from the drop in Ametek's long position.| Crane NXT vs. Donaldson | Crane NXT vs. ITT Inc | Crane NXT vs. Franklin Electric Co | Crane NXT vs. Enerpac Tool Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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