Correlation Between Crane and JBT Old

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

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

Diversification Opportunities for Crane and JBT Old

0.0

Correlation Coefficient

Crane  JBT Old

Pay attention - limited upside

The 3 months correlation between Crane and JBT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Crane Company and JBT Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBT Old 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 JBT Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBT Old has no effect on the direction of Crane i.e., Crane and JBT Old go up and down completely randomly.

Pair Corralation between Crane and JBT Old

If you would invest  15,620  in Crane Company on December 26, 2024 and sell it today you would earn a total of  419.00  from holding Crane Company or generate 2.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Crane Company  vs.  JBT Old

Crane Company

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Crane Company are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

JBT Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days JBT Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, JBT Old is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Crane and JBT Old

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

The idea behind Crane Company and JBT Old 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.

Check out your portfolio center.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.