Correlation Between Crawford Multi and Crawford Dividend

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

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

Diversification Opportunities for Crawford Multi and Crawford Dividend

0.82

Correlation Coefficient

Crawford Multi  Crawford Dividend

Very poor diversification

The 3 months correlation between Crawford and Crawford is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Crawford Multi Asset Income and Crawford Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crawford Dividend Growth and Crawford Multi 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 Multi Asset Income are associated (or correlated) with Crawford Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crawford Dividend Growth has no effect on the direction of Crawford Multi i.e., Crawford Multi and Crawford Dividend go up and down completely randomly.

Pair Corralation between Crawford Multi and Crawford Dividend

Assuming the 90 days horizon Crawford Multi Asset Income is expected to under-perform the Crawford Dividend. But the mutual fund apears to be less risky and, when comparing its historical volatility, Crawford Multi Asset Income is 1.35 times less risky than Crawford Dividend. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Crawford Dividend Growth is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  1,529  in Crawford Dividend Growth on September 23, 2024 and sell it today you would lose (39.00) from holding Crawford Dividend Growth or give up 2.55% of portfolio value over 90 days.

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

Crawford Multi Asset Income  vs.  Crawford Dividend Growth

Crawford Multi Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crawford Multi Asset Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Crawford Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Crawford Dividend Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crawford Dividend Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Crawford Dividend is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Crawford Multi and Crawford Dividend

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

The idea behind Crawford Multi Asset Income and Crawford Dividend Growth 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.