Correlation Between Crane NXT and Camber Energy

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

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

Diversification Opportunities for Crane NXT and Camber Energy

-0.51

Correlation Coefficient

Crane NXT  Camber Energy

Excellent diversification

The 3 months correlation between Crane and Camber is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Crane NXT Co and Camber Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camber Energy and Crane NXT 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 NXT Co are associated (or correlated) with Camber Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camber Energy has no effect on the direction of Crane NXT i.e., Crane NXT and Camber Energy go up and down completely randomly.

Pair Corralation between Crane NXT and Camber Energy

Considering the 90-day investment horizon Crane NXT Co is expected to generate 0.4 times more return on investment than Camber Energy. However, Crane NXT Co is 2.52 times less risky than Camber Energy. It trades about 0.11 of its potential returns per unit of risk. Camber Energy is currently generating about -0.07 per unit of risk. If you would invest  5,601  in Crane NXT Co on September 2, 2024 and sell it today you would earn a total of  667.00  from holding Crane NXT Co or generate 11.91% return on investment over 90 days.

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

Crane NXT Co  vs.  Camber Energy

Crane NXT

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Crane NXT Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Crane NXT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Camber Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Camber Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Crane NXT and Camber Energy

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

The idea behind Crane NXT Co and Camber Energy 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.