Correlation Between CRAWFORD A and KOWORLD AG

Can any of the company-specific risk be diversified away by investing in both CRAWFORD A and KOWORLD AG 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 KOWORLD AG 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 KOWORLD AG, you can compare the effects of market volatilities on CRAWFORD A and KOWORLD AG 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 KOWORLD AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRAWFORD A and KOWORLD AG.

Diversification Opportunities for CRAWFORD A and KOWORLD AG

-0.05

Correlation Coefficient

CRAWFORD A  KOWORLD AG

Good diversification

The 3 months correlation between CRAWFORD and KOWORLD is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding CRAWFORD A NV and KOWORLD AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOWORLD AG 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 KOWORLD AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOWORLD AG has no effect on the direction of CRAWFORD A i.e., CRAWFORD A and KOWORLD AG go up and down completely randomly.

Pair Corralation between CRAWFORD A and KOWORLD AG

Assuming the 90 days trading horizon CRAWFORD A NV is expected to generate 1.37 times more return on investment than KOWORLD AG. However, CRAWFORD A is 1.37 times more volatile than KOWORLD AG. It trades about 0.01 of its potential returns per unit of risk. KOWORLD AG is currently generating about 0.0 per unit of risk. If you would invest  1,136  in CRAWFORD A NV on September 27, 2024 and sell it today you would lose (76.00) from holding CRAWFORD A NV or give up 6.69% of portfolio value over 90 days.

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

CRAWFORD A NV  vs.  KOWORLD AG

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.

KOWORLD AG

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days KOWORLD AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, KOWORLD AG is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CRAWFORD A and KOWORLD AG

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

The idea behind CRAWFORD A NV and KOWORLD AG 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .