Correlation Between Lion Electric and Wabash National
Can any of the company-specific risk be diversified away by investing in both Lion Electric 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 Lion Electric and Wabash National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Electric Corp and Wabash National, you can compare the effects of market volatilities on Lion Electric 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 Lion Electric with a short position of Wabash National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Electric and Wabash National.
Diversification Opportunities for Lion Electric and Wabash National
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lion and Wabash is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lion Electric Corp and Wabash National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wabash National and Lion Electric 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 Lion Electric Corp 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 Lion Electric i.e., Lion Electric and Wabash National go up and down completely randomly.
Pair Corralation between Lion Electric and Wabash National
If you would invest 7.01 in Lion Electric Corp on October 21, 2024 and sell it today you would earn a total of 0.00 from holding Lion Electric Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
Lion Electric Corp vs. Wabash National
Performance |
| Timeline |
| Lion Electric Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Wabash National |
Lion Electric and Wabash National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Electric and Wabash National
The main advantage of trading using opposite Lion Electric and Wabash National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Electric 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.| Lion Electric vs. Xos Inc | Lion Electric vs. Ideanomics | Lion Electric vs. Nikola Corp | Lion Electric vs. Wabash National |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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