Correlation Between Selectquote and Crawford

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

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

Diversification Opportunities for Selectquote and Crawford

-0.41

Correlation Coefficient

Selectquote  Crawford

Very good diversification

The 3 months correlation between Selectquote and Crawford is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Selectquote and Crawford Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crawford and Selectquote 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 Selectquote are associated (or correlated) with Crawford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crawford has no effect on the direction of Selectquote i.e., Selectquote and Crawford go up and down completely randomly.

Pair Corralation between Selectquote and Crawford

Given the investment horizon of 90 days Selectquote is expected to under-perform the Crawford. In addition to that, Selectquote is 3.47 times more volatile than Crawford Company. It trades about -0.03 of its total potential returns per unit of risk. Crawford Company is currently generating about 0.09 per unit of volatility. If you would invest  1,051  in Crawford Company on August 30, 2024 and sell it today you would earn a total of  118.00  from holding Crawford Company or generate 11.23% return on investment over 90 days.

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

Selectquote  vs.  Crawford Company

Selectquote

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Selectquote has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Crawford

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Crawford Company are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Crawford may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Selectquote and Crawford

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

The idea behind Selectquote and Crawford Company 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.