Correlation Between Columbus McKinnon and Deere
Can any of the company-specific risk be diversified away by investing in both Columbus McKinnon and Deere 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 Columbus McKinnon and Deere into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbus McKinnon and Deere Company, you can compare the effects of market volatilities on Columbus McKinnon and Deere 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 Columbus McKinnon with a short position of Deere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbus McKinnon and Deere.
Diversification Opportunities for Columbus McKinnon and Deere
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Columbus and Deere is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Columbus McKinnon and Deere Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deere Company and Columbus McKinnon 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 Columbus McKinnon are associated (or correlated) with Deere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deere Company has no effect on the direction of Columbus McKinnon i.e., Columbus McKinnon and Deere go up and down completely randomly.
Pair Corralation between Columbus McKinnon and Deere
Given the investment horizon of 90 days Columbus McKinnon is expected to generate 1.23 times more return on investment than Deere. However, Columbus McKinnon is 1.23 times more volatile than Deere Company. It trades about 0.07 of its potential returns per unit of risk. Deere Company is currently generating about 0.04 per unit of risk. If you would invest 2,535 in Columbus McKinnon on January 19, 2024 and sell it today you would earn a total of 1,532 from holding Columbus McKinnon or generate 60.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbus McKinnon vs. Deere Company
Performance |
| Timeline |
| Columbus McKinnon |
| Deere Company |
Columbus McKinnon and Deere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbus McKinnon and Deere
The main advantage of trading using opposite Columbus McKinnon and Deere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbus McKinnon position performs unexpectedly, Deere 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 Deere will offset losses from the drop in Deere's long position.| Columbus McKinnon vs. Lindsay | Columbus McKinnon vs. Astec Industries | Columbus McKinnon vs. Shyft Group | Columbus McKinnon vs. AGCO Corporation |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |