Correlation Between CIRCOR International and IDEX

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

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

Diversification Opportunities for CIRCOR International and IDEX

0.78

Correlation Coefficient

CIRCOR International  IDEX

Poor diversification

The 3 months correlation between CIRCOR and IDEX is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CIRCOR International and IDEX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEX and CIRCOR International 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 CIRCOR International are associated (or correlated) with IDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEX has no effect on the direction of CIRCOR International i.e., CIRCOR International and IDEX go up and down completely randomly.

Pair Corralation between CIRCOR International and IDEX

If you would invest  21,900  in IDEX Corporation on September 4, 2024 and sell it today you would earn a total of  1,281  from holding IDEX Corporation or generate 5.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

CIRCOR International  vs.  IDEX Corp.

CIRCOR International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CIRCOR International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, CIRCOR International is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

IDEX

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IDEX Corporation are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, IDEX showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CIRCOR International and IDEX

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

The idea behind CIRCOR International and IDEX Corporation 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.