Correlation Between Taylor Devices and Graham
Can any of the company-specific risk be diversified away by investing in both Taylor Devices 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 Taylor Devices and Graham into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taylor Devices and Graham, you can compare the effects of market volatilities on Taylor Devices 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 Taylor Devices with a short position of Graham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taylor Devices and Graham.
Diversification Opportunities for Taylor Devices and Graham
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taylor and Graham is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Taylor Devices and Graham in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham and Taylor Devices 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 Taylor Devices 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 Taylor Devices i.e., Taylor Devices and Graham go up and down completely randomly.
Pair Corralation between Taylor Devices and Graham
Given the investment horizon of 90 days Taylor Devices is expected to generate 9.78 times less return on investment than Graham. In addition to that, Taylor Devices is 1.18 times more volatile than Graham. It trades about 0.04 of its total potential returns per unit of risk. Graham is currently generating about 0.52 per unit of volatility. If you would invest 2,802 in Graham on September 1, 2024 and sell it today you would earn a total of 1,680 from holding Graham or generate 59.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taylor Devices vs. Graham
Performance |
| Timeline |
| Taylor Devices |
| Graham |
Taylor Devices and Graham Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taylor Devices and Graham
The main advantage of trading using opposite Taylor Devices and Graham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taylor Devices 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.| Taylor Devices vs. Tennant Company | Taylor Devices vs. Kadant Inc | Taylor Devices vs. Enpro Industries | Taylor Devices vs. Luxfer Holdings PLC |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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