Correlation Between Ecosphere Technologies and Crane

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

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

Diversification Opportunities for Ecosphere Technologies and Crane

0.0

Correlation Coefficient

Ecosphere Technologies  Crane

Pay attention - limited upside

The 3 months correlation between Ecosphere and Crane is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ecosphere Technologies and Crane Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crane Company and Ecosphere Technologies 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 Ecosphere Technologies are associated (or correlated) with Crane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crane Company has no effect on the direction of Ecosphere Technologies i.e., Ecosphere Technologies and Crane go up and down completely randomly.

Pair Corralation between Ecosphere Technologies and Crane

If you would invest  13,776  in Crane Company on February 7, 2024 and sell it today you would earn a total of  685.00  from holding Crane Company or generate 4.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ecosphere Technologies  vs.  Crane Company

Ecosphere Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecosphere Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Ecosphere Technologies is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Crane Company

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Crane Company are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Crane reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ecosphere Technologies and Crane

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

The idea behind Ecosphere Technologies and Crane Company 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..