Correlation Between Far East and Wabash National
Can any of the company-specific risk be diversified away by investing in both Far East 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 Far East and Wabash National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Far East Wind and Wabash National, you can compare the effects of market volatilities on Far East 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 Far East with a short position of Wabash National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Far East and Wabash National.
Diversification Opportunities for Far East and Wabash National
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Far and Wabash is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Far East Wind and Wabash National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wabash National and Far East 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 Far East Wind 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 Far East i.e., Far East and Wabash National go up and down completely randomly.
Pair Corralation between Far East and Wabash National
If you would invest 0.01 in Far East Wind on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Far East Wind or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Far East Wind vs. Wabash National
Performance |
| Timeline |
| Far East Wind |
| Wabash National |
Far East and Wabash National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Far East and Wabash National
The main advantage of trading using opposite Far East and Wabash National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Far East 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.| Far East vs. Wabash National | Far East vs. SNDL Inc | Far East vs. Marine Products | Far East vs. Fomento Economico Mexicano |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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