Correlation Between Crane Holdings and 3M

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Crane Holdings and 3M 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 Crane Holdings and 3M into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crane Holdings CO and 3M Company, you can compare the effects of market volatilities on Crane Holdings and 3M 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 Crane Holdings with a short position of 3M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crane Holdings and 3M.

Diversification Opportunities for Crane Holdings and 3M

0.08
  Correlation Coefficient

Significant diversification

The 24 months correlation between Crane and 3M is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Crane Holdings CO and 3M Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3M Company and Crane Holdings 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 Crane Holdings CO are associated (or correlated) with 3M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3M Company has no effect on the direction of Crane Holdings i.e., Crane Holdings and 3M go up and down completely randomly.

Pair Corralation between Crane Holdings and 3M

Allowing for the 90-day total investment horizon Crane Holdings CO is expected to generate 1.19 times more return on investment than 3M. However, Crane Holdings is 1.19 times more volatile than 3M Company. It trades about -0.01 of its potential returns per unit of risk. 3M Company is currently generating about -0.11 per unit of risk. If you would invest  10,040  in Crane Holdings CO on July 5, 2022 and sell it today you would lose (956.00)  from holding Crane Holdings CO or give up 9.52% of portfolio value over 90 days.
Time Period24 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Crane Holdings CO  vs.  3M Company

 Performance (%) 
       Timeline  
Crane Holdings CO 
Crane Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Crane Holdings CO are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Crane Holdings may actually be approaching a critical reversion point that can send shares even higher in November 2022.

Crane Price Channel

3M Company 
3M Performance
0 of 100
Over the last 90 days 3M Company has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady primary indicators, 3M is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

3M Price Channel

Crane Holdings and 3M Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Crane Holdings and 3M

The main advantage of trading using opposite Crane Holdings and 3M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crane Holdings position performs unexpectedly, 3M 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 3M will offset losses from the drop in 3M's long position.
Crane Holdings vs. Amazon Inc
The idea behind Crane Holdings CO and 3M 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.
3M vs. Mercadolibre
3M vs. MEITUAN
3M vs. Coupang Inc Cl
3M vs. Yahoo Japan Corp
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

Other Complementary Tools

Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go