Correlation Between Taylor Devices and CIRCOR International

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

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

Diversification Opportunities for Taylor Devices and CIRCOR International

-0.63

Correlation Coefficient

Taylor Devices  CIRCOR International

Excellent diversification

The 3 months correlation between Taylor and CIRCOR is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Taylor Devices and CIRCOR International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIRCOR International and Taylor Devices 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 Taylor Devices 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 Taylor Devices i.e., Taylor Devices and CIRCOR International go up and down completely randomly.

Pair Corralation between Taylor Devices and CIRCOR International

If you would invest  5,585  in CIRCOR International on September 4, 2024 and sell it today you would earn a total of  0.00  from holding CIRCOR International or generate 0.0% return on investment over 90 days.

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

Taylor Devices  vs.  CIRCOR International

Taylor Devices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Taylor Devices has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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 Taylor Devices and CIRCOR International

The main advantage of trading using opposite Taylor Devices and CIRCOR International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taylor Devices 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 Taylor Devices 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.