Correlation Between Amphenol and CRAWFORD A

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

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

Diversification Opportunities for Amphenol and CRAWFORD A

0.81

Correlation Coefficient

Amphenol  CRAWFORD A

Very poor diversification

The 3 months correlation between Amphenol and CRAWFORD is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Amphenol and CRAWFORD A NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRAWFORD A NV and Amphenol 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 Amphenol are associated (or correlated) with CRAWFORD A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRAWFORD A NV has no effect on the direction of Amphenol i.e., Amphenol and CRAWFORD A go up and down completely randomly.

Pair Corralation between Amphenol and CRAWFORD A

Assuming the 90 days horizon Amphenol is expected to generate 0.79 times more return on investment than CRAWFORD A. However, Amphenol is 1.26 times less risky than CRAWFORD A. It trades about -0.09 of its potential returns per unit of risk. CRAWFORD A NV is currently generating about -0.08 per unit of risk. If you would invest  7,014  in Amphenol on September 27, 2024 and sell it today you would lose (233.00) from holding Amphenol or give up 3.32% of portfolio value over 90 days.

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

Amphenol  vs.  CRAWFORD A NV

Amphenol

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amphenol are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Amphenol reported solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Amphenol and CRAWFORD A

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

The idea behind Amphenol and CRAWFORD A NV 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.