Correlation Between Manitex International and Deere
Can any of the company-specific risk be diversified away by investing in both Manitex International and Deere 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 Manitex International and Deere into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manitex International and Deere Company, you can compare the effects of market volatilities on Manitex International and Deere 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 Manitex International with a short position of Deere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitex International and Deere.
Diversification Opportunities for Manitex International and Deere
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Manitex and Deere is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Manitex International and Deere Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deere Company and Manitex International 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 Manitex International are associated (or correlated) with Deere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deere Company has no effect on the direction of Manitex International i.e., Manitex International and Deere go up and down completely randomly.
Pair Corralation between Manitex International and Deere
Given the investment horizon of 90 days Manitex International is expected to generate 20.57 times less return on investment than Deere. But when comparing it to its historical volatility, Manitex International is 6.19 times less risky than Deere. It trades about 0.09 of its potential returns per unit of risk. Deere Company is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 40,469 in Deere Company on August 31, 2024 and sell it today you would earn a total of 6,131 from holding Deere Company or generate 15.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manitex International vs. Deere Company
Performance |
| Timeline |
| Manitex International |
| Deere Company |
Manitex International and Deere Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manitex International and Deere
The main advantage of trading using opposite Manitex International and Deere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitex International position performs unexpectedly, Deere 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 Deere will offset losses from the drop in Deere's long position.| Manitex International vs. Deere Company | Manitex International vs. Lindsay | Manitex International vs. Alamo Group | Manitex International vs. Manitowoc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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