Correlation Between AMETEK and Crane Holdings

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Can any of the company-specific risk be diversified away by investing in both AMETEK and Crane Holdings 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 AMETEK and Crane Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMETEK Inc and Crane Holdings CO, you can compare the effects of market volatilities on AMETEK and Crane Holdings 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 AMETEK with a short position of Crane Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMETEK and Crane Holdings.

Diversification Opportunities for AMETEK and Crane Holdings

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between AMETEK and Crane is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding AMETEK Inc and Crane Holdings CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crane Holdings CO and AMETEK 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 AMETEK Inc are associated (or correlated) with Crane Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crane Holdings CO has no effect on the direction of AMETEK i.e., AMETEK and Crane Holdings go up and down completely randomly.

Pair Corralation between AMETEK and Crane Holdings

Considering the 90-day investment horizon AMETEK Inc is expected to generate 0.85 times more return on investment than Crane Holdings. However, AMETEK Inc is 1.18 times less risky than Crane Holdings. It trades about 0.03 of its potential returns per unit of risk. Crane Holdings CO is currently generating about 0.0 per unit of risk. If you would invest  11,140  in AMETEK Inc on July 5, 2022 and sell it today you would earn a total of  201.00  from holding AMETEK Inc or generate 1.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

AMETEK Inc  vs.  Crane Holdings CO

 Performance (%) 
       Timeline  
AMETEK Inc 
AMETEK Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in AMETEK Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, AMETEK is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

AMETEK Price Channel

Crane Holdings CO 
Crane Performance
0 of 100
Over the last 90 days Crane Holdings CO has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Crane Holdings is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Crane Price Channel

AMETEK and Crane Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AMETEK and Crane Holdings

The main advantage of trading using opposite AMETEK and Crane Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMETEK position performs unexpectedly, Crane Holdings 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 Holdings will offset losses from the drop in Crane Holdings' long position.
AMETEK vs. Amazon Inc
The idea behind AMETEK Inc and Crane Holdings CO 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.
Crane Holdings vs. Amazon Inc
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 ETF Directory module to find actively traded Exchange Traded Funds (ETF) from around the world.

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