Correlation Between Xometry and Crane

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

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

Diversification Opportunities for Xometry and Crane

-0.34

Correlation Coefficient

Xometry  Crane

Very good diversification

The 3 months correlation between Xometry and Crane is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Xometry and Crane Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crane Company and Xometry 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 Xometry are associated (or correlated) with Crane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crane Company has no effect on the direction of Xometry i.e., Xometry and Crane go up and down completely randomly.

Pair Corralation between Xometry and Crane

Given the investment horizon of 90 days Xometry is expected to under-perform the Crane. In addition to that, Xometry is 1.78 times more volatile than Crane Company. It trades about -0.07 of its total potential returns per unit of risk. Crane Company is currently generating about -0.08 per unit of volatility. If you would invest  17,592  in Crane Company on December 5, 2024 and sell it today you would lose (2,140) from holding Crane Company or give up 12.16% of portfolio value over 90 days.

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

Xometry  vs.  Crane Company

Xometry

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xometry has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Crane Company

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crane Company has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Xometry and Crane

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

The idea behind Xometry and Crane 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.