Correlation Between Gorman Rupp and JE Cleantech
Can any of the company-specific risk be diversified away by investing in both Gorman Rupp and JE Cleantech 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 JE Cleantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gorman Rupp and JE Cleantech Holdings, you can compare the effects of market volatilities on Gorman Rupp and JE Cleantech 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 JE Cleantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gorman Rupp and JE Cleantech.
Diversification Opportunities for Gorman Rupp and JE Cleantech
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gorman and JCSE is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Gorman Rupp and JE Cleantech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JE Cleantech Holdings 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 JE Cleantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JE Cleantech Holdings has no effect on the direction of Gorman Rupp i.e., Gorman Rupp and JE Cleantech go up and down completely randomly.
Pair Corralation between Gorman Rupp and JE Cleantech
Considering the 90-day investment horizon Gorman Rupp is expected to generate 2.24 times less return on investment than JE Cleantech. But when comparing it to its historical volatility, Gorman Rupp is 5.27 times less risky than JE Cleantech. It trades about 0.1 of its potential returns per unit of risk. JE Cleantech Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 121.00 in JE Cleantech Holdings on August 31, 2024 and sell it today you would lose (2.00) from holding JE Cleantech Holdings or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gorman Rupp vs. JE Cleantech Holdings
Performance |
| Timeline |
| Gorman Rupp |
| JE Cleantech Holdings |
Gorman Rupp and JE Cleantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gorman Rupp and JE Cleantech
The main advantage of trading using opposite Gorman Rupp and JE Cleantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gorman Rupp position performs unexpectedly, JE Cleantech 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 JE Cleantech will offset losses from the drop in JE Cleantech'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 |
| JE Cleantech vs. IDEX Corporation | JE Cleantech vs. Watts Water Technologies | JE Cleantech vs. Donaldson | JE Cleantech vs. Gorman Rupp |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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