Correlation Between Church Crawford and All American

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

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

Diversification Opportunities for Church Crawford and All American

0.35

Correlation Coefficient

Church Crawford  All American

Weak diversification

The 3 months correlation between Church and All is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Church Crawford and All American Gld in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on All American Gld and Church 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 Church Crawford are associated (or correlated) with All American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of All American Gld has no effect on the direction of Church Crawford i.e., Church Crawford and All American go up and down completely randomly.

Pair Corralation between Church Crawford and All American

Given the investment horizon of 90 days Church Crawford is expected to generate 1.77 times less return on investment than All American. In addition to that, Church Crawford is 1.03 times more volatile than All American Gld. It trades about 0.05 of its total potential returns per unit of risk. All American Gld is currently generating about 0.09 per unit of volatility. If you would invest  0.03  in All American Gld on October 24, 2024 and sell it today you would earn a total of  0.09  from holding All American Gld or generate 300.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.52%
Values	Daily Returns

Church Crawford  vs.  All American Gld

Church Crawford

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Church Crawford are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Church Crawford reported solid returns over the last few months and may actually be approaching a breakup point.

All American Gld

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in All American Gld are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, All American exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Church Crawford and All American

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

The idea behind Church Crawford and All American Gld 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..