Correlation Between Crane and HUHUTECH International

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

By analyzing existing cross correlation between Crane Company and HUHUTECH International Group, you can compare the effects of market volatilities on Crane and HUHUTECH International 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 HUHUTECH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane and HUHUTECH International.

Diversification Opportunities for Crane and HUHUTECH International

-0.18

Correlation Coefficient

Crane  HUHUTECH International

Good diversification

The 3 months correlation between Crane and HUHUTECH is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and HUHUTECH International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUHUTECH International 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 HUHUTECH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUHUTECH International has no effect on the direction of Crane i.e., Crane and HUHUTECH International go up and down completely randomly.

Pair Corralation between Crane and HUHUTECH International

Allowing for the 90-day total investment horizon Crane Company is expected to under-perform the HUHUTECH International. But the stock apears to be less risky and, when comparing its historical volatility, Crane Company is 2.68 times less risky than HUHUTECH International. The stock trades about -0.12 of its potential returns per unit of risk. The HUHUTECH International Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  424.00  in HUHUTECH International Group on October 6, 2024 and sell it today you would earn a total of  32.00  from holding HUHUTECH International Group or generate 7.55% return on investment over 90 days.

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

Crane Company  vs.  HUHUTECH International Group

Crane Company

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crane Company has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Crane is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

HUHUTECH International

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HUHUTECH International Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical indicators, HUHUTECH International unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crane and HUHUTECH International

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

The idea behind Crane Company and HUHUTECH International Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.