Correlation Between Crane NXT and Helios Technologies
Can any of the company-specific risk be diversified away by investing in both Crane NXT and Helios Technologies 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 Helios Technologies 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 Helios Technologies, you can compare the effects of market volatilities on Crane NXT and Helios Technologies 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 Helios Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane NXT and Helios Technologies.
Diversification Opportunities for Crane NXT and Helios Technologies
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crane and Helios is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Crane NXT Co and Helios Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Technologies 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 Helios Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helios Technologies has no effect on the direction of Crane NXT i.e., Crane NXT and Helios Technologies go up and down completely randomly.
Pair Corralation between Crane NXT and Helios Technologies
Considering the 90-day investment horizon Crane NXT is expected to generate 44.94 times less return on investment than Helios Technologies. But when comparing it to its historical volatility, Crane NXT Co is 1.46 times less risky than Helios Technologies. It trades about 0.0 of its potential returns per unit of risk. Helios Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,358 in Helios Technologies on August 23, 2024 and sell it today you would earn a total of 873.00 from holding Helios Technologies or generate 20.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crane NXT Co vs. Helios Technologies
Performance |
| Timeline |
| Crane NXT |
| Helios Technologies |
Crane NXT and Helios Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crane NXT and Helios Technologies
The main advantage of trading using opposite Crane NXT and Helios Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane NXT position performs unexpectedly, Helios Technologies 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 Helios Technologies will offset losses from the drop in Helios Technologies' long position.| Crane NXT vs. Donaldson | Crane NXT vs. ITT Inc | Crane NXT vs. Franklin Electric Co | Crane NXT vs. Enerpac Tool Group |
| Helios Technologies vs. Illinois Tool Works | Helios Technologies vs. Pentair PLC | Helios Technologies vs. Emerson Electric | Helios Technologies vs. Smith AO |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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