Correlation Between Gorman Rupp and Mirion Technologies

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

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

Diversification Opportunities for Gorman Rupp and Mirion Technologies

0.76

Correlation Coefficient

Gorman Rupp  Mirion Technologies

Poor diversification

The 3 months correlation between Gorman and Mirion is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gorman Rupp and Mirion Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirion Technologies and Gorman Rupp 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 Gorman Rupp are associated (or correlated) with Mirion Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirion Technologies has no effect on the direction of Gorman Rupp i.e., Gorman Rupp and Mirion Technologies go up and down completely randomly.

Pair Corralation between Gorman Rupp and Mirion Technologies

Considering the 90-day investment horizon Gorman Rupp is expected to generate 1.83 times less return on investment than Mirion Technologies. But when comparing it to its historical volatility, Gorman Rupp is 1.23 times less risky than Mirion Technologies. It trades about 0.06 of its potential returns per unit of risk. Mirion Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  670.00  in Mirion Technologies on September 14, 2024 and sell it today you would earn a total of  1,116  from holding Mirion Technologies or generate 166.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Gorman Rupp  vs.  Mirion Technologies

Gorman Rupp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gorman Rupp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Gorman Rupp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mirion Technologies

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Mirion Technologies are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Mirion Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gorman Rupp and Mirion Technologies

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

The idea behind Gorman Rupp and Mirion Technologies 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.