Correlation Between Vita Coco and Modine Manufacturing
Can any of the company-specific risk be diversified away by investing in both Vita Coco and Modine Manufacturing 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 Vita Coco and Modine Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vita Coco and Modine Manufacturing, you can compare the effects of market volatilities on Vita Coco and Modine Manufacturing 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 Vita Coco with a short position of Modine Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vita Coco and Modine Manufacturing.
Diversification Opportunities for Vita Coco and Modine Manufacturing
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Vita and Modine is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Vita Coco and Modine Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modine Manufacturing and Vita Coco 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 Vita Coco are associated (or correlated) with Modine Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modine Manufacturing has no effect on the direction of Vita Coco i.e., Vita Coco and Modine Manufacturing go up and down completely randomly.
Pair Corralation between Vita Coco and Modine Manufacturing
Given the investment horizon of 90 days Vita Coco is expected to under-perform the Modine Manufacturing. But the stock apears to be less risky and, when comparing its historical volatility, Vita Coco is 1.31 times less risky than Modine Manufacturing. The stock trades about -0.13 of its potential returns per unit of risk. The Modine Manufacturing is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 11,748 in Modine Manufacturing on October 22, 2024 and sell it today you would earn a total of 1,532 from holding Modine Manufacturing or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vita Coco vs. Modine Manufacturing
Performance |
| Timeline |
| Vita Coco |
| Modine Manufacturing |
Vita Coco and Modine Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vita Coco and Modine Manufacturing
The main advantage of trading using opposite Vita Coco and Modine Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vita Coco position performs unexpectedly, Modine Manufacturing 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 Modine Manufacturing will offset losses from the drop in Modine Manufacturing's long position.| Vita Coco vs. Coca Cola Femsa SAB | Vita Coco vs. Coca Cola European Partners | Vita Coco vs. Embotelladora Andina SA | Vita Coco vs. Monster Beverage Corp |
| Modine Manufacturing vs. Cooper Stnd | Modine Manufacturing vs. Motorcar Parts of | Modine Manufacturing vs. American Axle Manufacturing | Modine Manufacturing vs. Stoneridge |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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