Correlation Between Crane and Ampco Pittsburgh
Can any of the company-specific risk be diversified away by investing in both Crane and Ampco Pittsburgh 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 Crane and Ampco Pittsburgh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Company and Ampco Pittsburgh, you can compare the effects of market volatilities on Crane and Ampco Pittsburgh 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 Crane with a short position of Ampco Pittsburgh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and Ampco Pittsburgh.
Diversification Opportunities for Crane and Ampco Pittsburgh
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Crane and Ampco is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and Ampco Pittsburgh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampco Pittsburgh and Crane 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 Crane Company are associated (or correlated) with Ampco Pittsburgh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampco Pittsburgh has no effect on the direction of Crane i.e., Crane and Ampco Pittsburgh go up and down completely randomly.
Pair Corralation between Crane and Ampco Pittsburgh
Allowing for the 90-day total investment horizon Crane Company is expected to generate 0.22 times more return on investment than Ampco Pittsburgh. However, Crane Company is 4.64 times less risky than Ampco Pittsburgh. It trades about -0.11 of its potential returns per unit of risk. Ampco Pittsburgh is currently generating about -0.08 per unit of risk. If you would invest 13,348 in Crane Company on January 20, 2024 and sell it today you would lose (409.00) from holding Crane Company or give up 3.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crane Company vs. Ampco Pittsburgh
Performance |
| Timeline |
| Crane Company |
| Ampco Pittsburgh |
Crane and Ampco Pittsburgh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crane and Ampco Pittsburgh
The main advantage of trading using opposite Crane and Ampco Pittsburgh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane position performs unexpectedly, Ampco Pittsburgh 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 Ampco Pittsburgh will offset losses from the drop in Ampco Pittsburgh's long position.| Crane vs. Standex International | Crane vs. Donaldson | Crane vs. CSW Industrials | Crane vs. Franklin Electric Co |
| Ampco Pittsburgh vs. Northwest Pipe | Ampco Pittsburgh vs. Insteel Industries | Ampco Pittsburgh vs. Carpenter Technology | Ampco Pittsburgh vs. ESAB Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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