Correlation Between ScanTech and Trane Technologies

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

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

Diversification Opportunities for ScanTech and Trane Technologies

-0.89

Correlation Coefficient

ScanTech  Trane Technologies

Pay attention - limited upside

The 3 months correlation between ScanTech and Trane is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding ScanTech AI Systems and Trane Technologies plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trane Technologies plc and ScanTech 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 ScanTech AI Systems are associated (or correlated) with Trane Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trane Technologies plc has no effect on the direction of ScanTech i.e., ScanTech and Trane Technologies go up and down completely randomly.

Pair Corralation between ScanTech and Trane Technologies

Given the investment horizon of 90 days ScanTech AI Systems is expected to under-perform the Trane Technologies. In addition to that, ScanTech is 3.51 times more volatile than Trane Technologies plc. It trades about -0.25 of its total potential returns per unit of risk. Trane Technologies plc is currently generating about 0.33 per unit of volatility. If you would invest  33,189  in Trane Technologies plc on April 22, 2025 and sell it today you would earn a total of  11,544  from holding Trane Technologies plc or generate 34.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ScanTech AI Systems  vs.  Trane Technologies plc

ScanTech AI Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days ScanTech AI Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in August 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Trane Technologies plc

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Trane Technologies plc are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Trane Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ScanTech and Trane Technologies

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

The idea behind ScanTech AI Systems and Trane Technologies plc 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.