Correlation Between Taylor Devices and IDEX
Can any of the company-specific risk be diversified away by investing in both Taylor Devices and IDEX 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 IDEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taylor Devices and IDEX Corporation, you can compare the effects of market volatilities on Taylor Devices and IDEX 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 IDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taylor Devices and IDEX.
Diversification Opportunities for Taylor Devices and IDEX
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Taylor and IDEX is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Taylor Devices and IDEX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEX 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 IDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEX has no effect on the direction of Taylor Devices i.e., Taylor Devices and IDEX go up and down completely randomly.
Pair Corralation between Taylor Devices and IDEX
Given the investment horizon of 90 days Taylor Devices is expected to under-perform the IDEX. In addition to that, Taylor Devices is 2.58 times more volatile than IDEX Corporation. It trades about -0.23 of its total potential returns per unit of risk. IDEX Corporation is currently generating about -0.11 per unit of volatility. If you would invest 23,531 in IDEX Corporation on October 25, 2024 and sell it today you would lose (1,299) from holding IDEX Corporation or give up 5.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taylor Devices vs. IDEX Corp.
Performance |
| Timeline |
| Taylor Devices |
| IDEX |
Taylor Devices and IDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taylor Devices and IDEX
The main advantage of trading using opposite Taylor Devices and IDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taylor Devices position performs unexpectedly, IDEX 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 IDEX will offset losses from the drop in IDEX's long position.| Taylor Devices vs. Tennant Company | Taylor Devices vs. Kadant Inc | Taylor Devices vs. Enpro Industries | Taylor Devices vs. Luxfer Holdings PLC |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |