Correlation Between Graham and Standex International
Can any of the company-specific risk be diversified away by investing in both Graham 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 Graham and Standex International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graham and Standex International, you can compare the effects of market volatilities on Graham 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 Graham with a short position of Standex International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graham and Standex International.
Diversification Opportunities for Graham and Standex International
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Graham and Standex is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Graham and Standex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standex International and Graham 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 Graham 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 Graham i.e., Graham and Standex International go up and down completely randomly.
Pair Corralation between Graham and Standex International
Considering the 90-day investment horizon Graham is expected to generate 1.64 times more return on investment than Standex International. However, Graham is 1.64 times more volatile than Standex International. It trades about 0.52 of its potential returns per unit of risk. Standex International is currently generating about 0.23 per unit of risk. If you would invest 2,802 in Graham on September 1, 2024 and sell it today you would earn a total of 1,680 from holding Graham or generate 59.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graham vs. Standex International
Performance |
| Timeline |
| Graham |
| Standex International |
Graham and Standex International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graham and Standex International
The main advantage of trading using opposite Graham and Standex International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graham 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.| Graham vs. Luxfer Holdings PLC | Graham vs. Enerpac Tool Group | Graham vs. Kadant Inc | Graham vs. Omega Flex |
| 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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