Correlation Between Graco and CIRCOR International

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

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

Diversification Opportunities for Graco and CIRCOR International

0.59

Correlation Coefficient

Graco  CIRCOR International

Very weak diversification

The 3 months correlation between Graco and CIRCOR is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Graco Inc and CIRCOR International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIRCOR International and Graco 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 Graco Inc are associated (or correlated) with CIRCOR International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIRCOR International has no effect on the direction of Graco i.e., Graco and CIRCOR International go up and down completely randomly.

Pair Corralation between Graco and CIRCOR International

If you would invest  8,140  in Graco Inc on September 3, 2024 and sell it today you would earn a total of  968.00  from holding Graco Inc or generate 11.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Graco Inc  vs.  CIRCOR International

Graco Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Graco Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Graco may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

Pair Trading with Graco and CIRCOR International

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

The idea behind Graco Inc and CIRCOR International 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.

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 the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.