Correlation Between Ampco Pittsburgh and Crane
Can any of the company-specific risk be diversified away by investing in both Ampco Pittsburgh and Crane 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 Ampco Pittsburgh and Crane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampco Pittsburgh and Crane Company, you can compare the effects of market volatilities on Ampco Pittsburgh and Crane 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 Ampco Pittsburgh with a short position of Crane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampco Pittsburgh and Crane.
Diversification Opportunities for Ampco Pittsburgh and Crane
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ampco and Crane is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ampco Pittsburgh and Crane Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crane Company and Ampco Pittsburgh 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 Ampco Pittsburgh are associated (or correlated) with Crane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crane Company has no effect on the direction of Ampco Pittsburgh i.e., Ampco Pittsburgh and Crane go up and down completely randomly.
Pair Corralation between Ampco Pittsburgh and Crane
Allowing for the 90-day total investment horizon Ampco Pittsburgh is expected to under-perform the Crane. In addition to that, Ampco Pittsburgh is 2.86 times more volatile than Crane Company. It trades about -0.2 of its total potential returns per unit of risk. Crane Company is currently generating about 0.15 per unit of volatility. If you would invest 13,424 in Crane Company on January 25, 2024 and sell it today you would earn a total of 748.00 from holding Crane Company or generate 5.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ampco Pittsburgh vs. Crane Company
Performance |
| Timeline |
| Ampco Pittsburgh |
| Crane Company |
Ampco Pittsburgh and Crane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampco Pittsburgh and Crane
The main advantage of trading using opposite Ampco Pittsburgh and Crane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampco Pittsburgh position performs unexpectedly, Crane 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 Crane will offset losses from the drop in Crane's long position.| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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