Correlation Between Mader Group and Modine Manufacturing
Can any of the company-specific risk be diversified away by investing in both Mader Group 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 Mader Group and Modine Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mader Group Limited and Modine Manufacturing, you can compare the effects of market volatilities on Mader Group 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 Mader Group with a short position of Modine Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mader Group and Modine Manufacturing.
Diversification Opportunities for Mader Group and Modine Manufacturing
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mader and Modine is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mader Group Limited and Modine Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modine Manufacturing and Mader Group 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 Mader Group Limited 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 Mader Group i.e., Mader Group and Modine Manufacturing go up and down completely randomly.
Pair Corralation between Mader Group and Modine Manufacturing
Assuming the 90 days horizon Mader Group Limited is expected to under-perform the Modine Manufacturing. But the pink sheet apears to be less risky and, when comparing its historical volatility, Mader Group Limited is 2.22 times less risky than Modine Manufacturing. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Modine Manufacturing is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9,870 in Modine Manufacturing on October 22, 2024 and sell it today you would earn a total of 3,410 from holding Modine Manufacturing or generate 34.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Mader Group Limited vs. Modine Manufacturing
Performance |
| Timeline |
| Mader Group Limited |
| Modine Manufacturing |
Mader Group and Modine Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mader Group and Modine Manufacturing
The main advantage of trading using opposite Mader Group and Modine Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mader Group 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.| Mader Group vs. Modine Manufacturing | Mader Group vs. RLX Technology | Mader Group vs. U Power Limited | Mader Group vs. Altria Group |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |