Correlation Between SPX Corp and Donaldson
Can any of the company-specific risk be diversified away by investing in both SPX Corp and Donaldson 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 SPX Corp and Donaldson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPX Corp and Donaldson, you can compare the effects of market volatilities on SPX Corp and Donaldson 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 SPX Corp with a short position of Donaldson. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPX Corp and Donaldson.
Diversification Opportunities for SPX Corp and Donaldson
Poor diversification
The 3 months correlation between SPX and Donaldson is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding SPX Corp and Donaldson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Donaldson and SPX Corp 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 SPX Corp are associated (or correlated) with Donaldson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Donaldson has no effect on the direction of SPX Corp i.e., SPX Corp and Donaldson go up and down completely randomly.
Pair Corralation between SPX Corp and Donaldson
Given the investment horizon of 90 days SPX Corp is expected to generate 1.02 times less return on investment than Donaldson. In addition to that, SPX Corp is 1.73 times more volatile than Donaldson. It trades about 0.06 of its total potential returns per unit of risk. Donaldson is currently generating about 0.11 per unit of volatility. If you would invest 8,210 in Donaldson on October 7, 2025 and sell it today you would earn a total of 783.00 from holding Donaldson or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPX Corp vs. Donaldson
Performance |
| Timeline |
| SPX Corp |
| Donaldson |
SPX Corp and Donaldson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPX Corp and Donaldson
The main advantage of trading using opposite SPX Corp and Donaldson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPX Corp position performs unexpectedly, Donaldson 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 Donaldson will offset losses from the drop in Donaldson's long position.| SPX Corp vs. Donaldson | SPX Corp vs. Generac Holdings | SPX Corp vs. Crane Company | SPX Corp vs. Regal Beloit |
| Donaldson vs. Generac Holdings | Donaldson vs. Watts Water Technologies | Donaldson vs. Smith AO | Donaldson vs. Flowserve |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |