Correlation Between Donaldson and Crawford United

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

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

Diversification Opportunities for Donaldson and Crawford United

0.0

Correlation Coefficient

Donaldson  Crawford United

Pay attention - limited upside

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

Pair Corralation between Donaldson and Crawford United

If you would invest (100.00) in Crawford United on December 2, 2024 and sell it today you would earn a total of  100.00  from holding Crawford United or generate -100.0% return on investment over 90 days.

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

Donaldson  vs.  Crawford United

Donaldson

Risk-Adjusted Performance

Very Weak

Over the last 90 days Donaldson has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Crawford United

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crawford United has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Crawford United is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Donaldson and Crawford United

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

The idea behind Donaldson and Crawford United 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.