Correlation Between Standex International and Graham
Can any of the company-specific risk be diversified away by investing in both Standex International and Graham 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 Graham into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standex International and Graham, you can compare the effects of market volatilities on Standex International and Graham 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 Graham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standex International and Graham.
Diversification Opportunities for Standex International and Graham
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Standex and Graham is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Standex International and Graham in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham 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 Graham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham has no effect on the direction of Standex International i.e., Standex International and Graham go up and down completely randomly.
Pair Corralation between Standex International and Graham
Considering the 90-day investment horizon Standex International is expected to generate 2.2 times less return on investment than Graham. But when comparing it to its historical volatility, Standex International is 1.5 times less risky than Graham. It trades about 0.08 of its potential returns per unit of risk. Graham is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 990.00 in Graham on August 24, 2024 and sell it today you would earn a total of 3,475 from holding Graham or generate 351.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standex International vs. Graham
Performance |
| Timeline |
| Standex International |
| Graham |
Standex International and Graham Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standex International and Graham
The main advantage of trading using opposite Standex International and Graham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standex International position performs unexpectedly, Graham 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 Graham will offset losses from the drop in Graham'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 |
| Graham vs. Luxfer Holdings PLC | Graham vs. Enerpac Tool Group | Graham vs. Kadant Inc | Graham vs. Omega Flex |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Commodity Directory Find actively traded commodities issued by global exchanges |