Correlation Between China Clean and Wabash National
Can any of the company-specific risk be diversified away by investing in both China Clean 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 China Clean and Wabash National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Clean Energy and Wabash National, you can compare the effects of market volatilities on China Clean 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 China Clean with a short position of Wabash National. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Clean and Wabash National.
Diversification Opportunities for China Clean and Wabash National
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Wabash is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Clean Energy and Wabash National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wabash National and China Clean 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 China Clean Energy 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 China Clean i.e., China Clean and Wabash National go up and down completely randomly.
Pair Corralation between China Clean and Wabash National
If you would invest 1,706 in Wabash National on August 24, 2024 and sell it today you would earn a total of 185.00 from holding Wabash National or generate 10.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Clean Energy vs. Wabash National
Performance |
| Timeline |
| China Clean Energy |
| Wabash National |
China Clean and Wabash National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Clean and Wabash National
The main advantage of trading using opposite China Clean and Wabash National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Clean 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.| China Clean vs. Sherwin Williams Co | China Clean vs. Air Liquide SA | China Clean vs. Air Products and | China Clean vs. Ecolab Inc |
| Wabash National vs. Rev Group | Wabash National vs. Gencor Industries | Wabash National vs. Alamo Group | Wabash National vs. Columbus McKinnon |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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