Correlation Between Gorman Rupp and Crane
Can any of the company-specific risk be diversified away by investing in both Gorman Rupp and Crane 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 Gorman Rupp and Crane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gorman Rupp and Crane Company, you can compare the effects of market volatilities on Gorman Rupp and Crane 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 Gorman Rupp with a short position of Crane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gorman Rupp and Crane.
Diversification Opportunities for Gorman Rupp and Crane
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gorman and Crane is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Gorman Rupp and Crane Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crane Company and Gorman Rupp 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 Gorman Rupp are associated (or correlated) with Crane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crane Company has no effect on the direction of Gorman Rupp i.e., Gorman Rupp and Crane go up and down completely randomly.
Pair Corralation between Gorman Rupp and Crane
Considering the 90-day investment horizon Gorman Rupp is expected to generate 4.24 times less return on investment than Crane. But when comparing it to its historical volatility, Gorman Rupp is 2.15 times less risky than Crane. It trades about 0.1 of its potential returns per unit of risk. Crane Company is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 15,098 in Crane Company on November 3, 2024 and sell it today you would earn a total of 1,934 from holding Crane Company or generate 12.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gorman Rupp vs. Crane Company
Performance |
| Timeline |
| Gorman Rupp |
| Crane Company |
Gorman Rupp and Crane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gorman Rupp and Crane
The main advantage of trading using opposite Gorman Rupp and Crane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gorman Rupp position performs unexpectedly, Crane 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 Crane will offset losses from the drop in Crane's long position.| Gorman Rupp vs. Standex International | Gorman Rupp vs. Franklin Electric Co | Gorman Rupp vs. Omega Flex | Gorman Rupp vs. China Yuchai International |
| Crane vs. Standex International | Crane vs. Donaldson | Crane vs. CSW Industrials | Crane vs. Franklin Electric Co |
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.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |