Correlation Between Crawford and Crawford

Can any of the company-specific risk be diversified away by investing in both Crawford and Crawford 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 Crawford and Crawford into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Crawford Company and Crawford Company, you can compare the effects of market volatilities on Crawford and Crawford 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 Crawford with a short position of Crawford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crawford and Crawford.

Diversification Opportunities for Crawford and Crawford

0.96

Correlation Coefficient

Crawford  Crawford

Almost no diversification

The 3 months correlation between Crawford and Crawford is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Crawford Company and Crawford Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crawford and Crawford 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 Crawford Company are associated (or correlated) with Crawford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crawford has no effect on the direction of Crawford i.e., Crawford and Crawford go up and down completely randomly.

Pair Corralation between Crawford and Crawford

Assuming the 90 days horizon Crawford Company is expected to under-perform the Crawford. But the stock apears to be less risky and, when comparing its historical volatility, Crawford Company is 1.24 times less risky than Crawford. The stock trades about -0.07 of its potential returns per unit of risk. The Crawford Company is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,076  in Crawford Company on January 13, 2025 and sell it today you would lose (71.00) from holding Crawford Company or give up 6.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Crawford Company  vs.  Crawford Company

Crawford

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crawford Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Crawford

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crawford Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Crawford is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Crawford and Crawford

The main advantage of trading using opposite Crawford and Crawford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crawford position performs unexpectedly, Crawford 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 Crawford will offset losses from the drop in Crawford's long position.

The idea behind Crawford Company and Crawford Company pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.