Correlation Between CRAWFORD A and Arthur J

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

By analyzing existing cross correlation between CRAWFORD A NV and Arthur J Gallagher, you can compare the effects of market volatilities on CRAWFORD A and Arthur J 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 A with a short position of Arthur J. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRAWFORD A and Arthur J.

Diversification Opportunities for CRAWFORD A and Arthur J

0.83

Correlation Coefficient

CRAWFORD A  Arthur J

Very poor diversification

The 3 months correlation between CRAWFORD and Arthur is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding CRAWFORD A NV and Arthur J Gallagher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arthur J Gallagher and CRAWFORD A 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 A NV are associated (or correlated) with Arthur J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arthur J Gallagher has no effect on the direction of CRAWFORD A i.e., CRAWFORD A and Arthur J go up and down completely randomly.

Pair Corralation between CRAWFORD A and Arthur J

Assuming the 90 days trading horizon CRAWFORD A NV is expected to generate 1.42 times more return on investment than Arthur J. However, CRAWFORD A is 1.42 times more volatile than Arthur J Gallagher. It trades about -0.08 of its potential returns per unit of risk. Arthur J Gallagher is currently generating about -0.23 per unit of risk. If you would invest  1,100  in CRAWFORD A NV on September 27, 2024 and sell it today you would lose (40.00) from holding CRAWFORD A NV or give up 3.64% of portfolio value over 90 days.

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

CRAWFORD A NV  vs.  Arthur J Gallagher

CRAWFORD A NV

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CRAWFORD A NV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, CRAWFORD A reported solid returns over the last few months and may actually be approaching a breakup point.

Arthur J Gallagher

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Arthur J Gallagher are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Arthur J may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CRAWFORD A and Arthur J

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

The idea behind CRAWFORD A NV and Arthur J Gallagher 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 Transaction History module to view history of all your transactions and understand their impact on performance.