Correlation Between Zurn Elkay and Continental
Can any of the company-specific risk be diversified away by investing in both Zurn Elkay and Continental 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 Zurn Elkay and Continental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zurn Elkay Water and Continental AG PK, you can compare the effects of market volatilities on Zurn Elkay and Continental 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 Zurn Elkay with a short position of Continental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurn Elkay and Continental.
Diversification Opportunities for Zurn Elkay and Continental
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zurn and Continental is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Zurn Elkay Water and Continental AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental AG PK and Zurn Elkay 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 Zurn Elkay Water are associated (or correlated) with Continental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental AG PK has no effect on the direction of Zurn Elkay i.e., Zurn Elkay and Continental go up and down completely randomly.
Pair Corralation between Zurn Elkay and Continental
Considering the 90-day investment horizon Zurn Elkay Water is expected to generate 0.57 times more return on investment than Continental. However, Zurn Elkay Water is 1.75 times less risky than Continental. It trades about 0.1 of its potential returns per unit of risk. Continental AG PK is currently generating about 0.03 per unit of risk. If you would invest 3,501 in Zurn Elkay Water on September 26, 2024 and sell it today you would earn a total of 281.00 from holding Zurn Elkay Water or generate 8.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Zurn Elkay Water vs. Continental AG PK
Performance |
Timeline |
Zurn Elkay Water |
Continental AG PK |
Zurn Elkay and Continental Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zurn Elkay and Continental
The main advantage of trading using opposite Zurn Elkay and Continental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurn Elkay position performs unexpectedly, Continental 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 Continental will offset losses from the drop in Continental's long position.Zurn Elkay vs. Energy Recovery | Zurn Elkay vs. CECO Environmental Corp | Zurn Elkay vs. 374Water Common Stock | Zurn Elkay vs. Federal Signal |
Continental vs. ATA Creativity Global | Continental vs. American Public Education | Continental vs. Skillful Craftsman Education | Continental vs. China Liberal Education |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
FinTech Suite Use AI to screen and filter profitable investment opportunities |