Correlation Between Standex International and John Bean
Can any of the company-specific risk be diversified away by investing in both Standex International and John Bean 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 John Bean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standex International and John Bean Technologies, you can compare the effects of market volatilities on Standex International and John Bean 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 John Bean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standex International and John Bean.
Diversification Opportunities for Standex International and John Bean
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Standex and John is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Standex International and John Bean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Bean Technologies 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 John Bean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Bean Technologies has no effect on the direction of Standex International i.e., Standex International and John Bean go up and down completely randomly.
Pair Corralation between Standex International and John Bean
Considering the 90-day investment horizon Standex International is expected to generate 1.23 times more return on investment than John Bean. However, Standex International is 1.23 times more volatile than John Bean Technologies. It trades about 0.28 of its potential returns per unit of risk. John Bean Technologies is currently generating about 0.13 per unit of risk. If you would invest 17,909 in Standex International on August 28, 2024 and sell it today you would earn a total of 3,243 from holding Standex International or generate 18.11% 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. John Bean Technologies
Performance |
| Timeline |
| Standex International |
| John Bean Technologies |
Standex International and John Bean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standex International and John Bean
The main advantage of trading using opposite Standex International and John Bean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standex International position performs unexpectedly, John Bean 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 John Bean will offset losses from the drop in John Bean'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 |
| John Bean vs. Aquagold International | John Bean vs. Morningstar Unconstrained Allocation | John Bean vs. High Yield Municipal Fund | John Bean vs. Thrivent High Yield |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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