Correlation Between Crane and Hillenbrand
Can any of the company-specific risk be diversified away by investing in both Crane and Hillenbrand 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 Hillenbrand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Company and Hillenbrand, you can compare the effects of market volatilities on Crane and Hillenbrand 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 Hillenbrand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and Hillenbrand.
Diversification Opportunities for Crane and Hillenbrand
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Crane and Hillenbrand is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and Hillenbrand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillenbrand 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 Hillenbrand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillenbrand has no effect on the direction of Crane i.e., Crane and Hillenbrand go up and down completely randomly.
Pair Corralation between Crane and Hillenbrand
Allowing for the 90-day total investment horizon Crane Company is expected to generate 1.19 times more return on investment than Hillenbrand. However, Crane is 1.19 times more volatile than Hillenbrand. It trades about 0.04 of its potential returns per unit of risk. Hillenbrand is currently generating about 0.03 per unit of risk. If you would invest 10,221 in Crane Company on December 30, 2023 and sell it today you would earn a total of 3,292 from holding Crane Company or generate 32.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Crane Company vs. Hillenbrand
Performance |
Timeline |
Crane Company |
Hillenbrand |
Crane and Hillenbrand Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Crane and Hillenbrand
The main advantage of trading using opposite Crane and Hillenbrand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane position performs unexpectedly, Hillenbrand 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 Hillenbrand will offset losses from the drop in Hillenbrand's long position.Crane vs. General Electric | Crane vs. Paul Mueller Co | Crane vs. Dupont De Nemours | Crane vs. American Express |
Hillenbrand vs. Barnes Group | Hillenbrand vs. Babcock Wilcox Enterprises | Hillenbrand vs. Crane Company | Hillenbrand vs. General Electric |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Transaction History View history of all your transactions and understand their impact on performance | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |