Correlation Between LCI Industries and Winnebago Industries
Can any of the company-specific risk be diversified away by investing in both LCI Industries and Winnebago Industries 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 LCI Industries and Winnebago Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LCI Industries and Winnebago Industries, you can compare the effects of market volatilities on LCI Industries and Winnebago Industries 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 LCI Industries with a short position of Winnebago Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of LCI Industries and Winnebago Industries.
Diversification Opportunities for LCI Industries and Winnebago Industries
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LCI and Winnebago is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding LCI Industries and Winnebago Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winnebago Industries and LCI Industries 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 LCI Industries are associated (or correlated) with Winnebago Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winnebago Industries has no effect on the direction of LCI Industries i.e., LCI Industries and Winnebago Industries go up and down completely randomly.
Pair Corralation between LCI Industries and Winnebago Industries
Assuming the 90 days horizon LCI Industries is expected to generate 0.88 times more return on investment than Winnebago Industries. However, LCI Industries is 1.14 times less risky than Winnebago Industries. It trades about 0.01 of its potential returns per unit of risk. Winnebago Industries is currently generating about -0.21 per unit of risk. If you would invest 10,400 in LCI Industries on October 19, 2024 and sell it today you would earn a total of 0.00 from holding LCI Industries or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
LCI Industries vs. Winnebago Industries
Performance |
| Timeline |
| LCI Industries |
| Winnebago Industries |
LCI Industries and Winnebago Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LCI Industries and Winnebago Industries
The main advantage of trading using opposite LCI Industries and Winnebago Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LCI Industries position performs unexpectedly, Winnebago Industries 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 Winnebago Industries will offset losses from the drop in Winnebago Industries' long position.| LCI Industries vs. SYSTEMAIR AB | LCI Industries vs. Delta Air Lines | LCI Industries vs. FAIR ISAAC | LCI Industries vs. Air New Zealand |
| Winnebago Industries vs. DALATA HOTEL | Winnebago Industries vs. InterContinental Hotels Group | Winnebago Industries vs. PPHE HOTEL GROUP | Winnebago Industries vs. Japan Tobacco |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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