Correlation Between Sinotruk and Wabash National
Can any of the company-specific risk be diversified away by investing in both Sinotruk and Wabash National 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 Sinotruk and Wabash National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinotruk Limited and Wabash National, you can compare the effects of market volatilities on Sinotruk and Wabash National 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 Sinotruk with a short position of Wabash National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinotruk and Wabash National.
Diversification Opportunities for Sinotruk and Wabash National
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sinotruk and Wabash is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sinotruk Limited and Wabash National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wabash National and Sinotruk 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 Sinotruk Limited are associated (or correlated) with Wabash National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wabash National has no effect on the direction of Sinotruk i.e., Sinotruk and Wabash National go up and down completely randomly.
Pair Corralation between Sinotruk and Wabash National
Assuming the 90 days horizon Sinotruk Limited is expected to generate 1.17 times more return on investment than Wabash National. However, Sinotruk is 1.17 times more volatile than Wabash National. It trades about 0.07 of its potential returns per unit of risk. Wabash National is currently generating about -0.03 per unit of risk. If you would invest 252.00 in Sinotruk Limited on October 15, 2024 and sell it today you would earn a total of 24.00 from holding Sinotruk Limited or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinotruk Limited vs. Wabash National
Performance |
| Timeline |
| Sinotruk Limited |
| Wabash National |
Sinotruk and Wabash National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinotruk and Wabash National
The main advantage of trading using opposite Sinotruk and Wabash National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinotruk position performs unexpectedly, Wabash National 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 Wabash National will offset losses from the drop in Wabash National's long position.| Sinotruk vs. AWILCO DRILLING PLC | Sinotruk vs. Austevoll Seafood ASA | Sinotruk vs. PRECISION DRILLING P | Sinotruk vs. EBRO FOODS |
| Wabash National vs. Q2M Managementberatung AG | Wabash National vs. Tower Semiconductor | Wabash National vs. Semiconductor Manufacturing International | Wabash National vs. Cal Maine Foods |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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