Correlation Between Standex International and Crane
Can any of the company-specific risk be diversified away by investing in both Standex International 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 Standex International and Crane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standex International and Crane Company, you can compare the effects of market volatilities on Standex International 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 Standex International with a short position of Crane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standex International and Crane.
Diversification Opportunities for Standex International and Crane
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Standex and Crane is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Standex International and Crane Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crane Company and Standex International 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 Standex International 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 Standex International i.e., Standex International and Crane go up and down completely randomly.
Pair Corralation between Standex International and Crane
Considering the 90-day investment horizon Standex International is expected to generate 1.3 times less return on investment than Crane. In addition to that, Standex International is 1.35 times more volatile than Crane Company. It trades about 0.25 of its total potential returns per unit of risk. Crane Company is currently generating about 0.45 per unit of volatility. If you would invest 14,898 in Crane Company on August 23, 2024 and sell it today you would earn a total of 3,418 from holding Crane Company or generate 22.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standex International vs. Crane Company
Performance |
| Timeline |
| Standex International |
| Crane Company |
Standex International and Crane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standex International and Crane
The main advantage of trading using opposite Standex International and Crane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standex International 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.| Standex International vs. Gorman Rupp | Standex International vs. Franklin Electric Co | Standex International vs. Omega Flex | Standex International 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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