Correlation Between Modine Manufacturing and Bowen Acquisition
Can any of the company-specific risk be diversified away by investing in both Modine Manufacturing and Bowen Acquisition 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 Modine Manufacturing and Bowen Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modine Manufacturing and Bowen Acquisition Corp, you can compare the effects of market volatilities on Modine Manufacturing and Bowen Acquisition 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 Modine Manufacturing with a short position of Bowen Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and Bowen Acquisition.
Diversification Opportunities for Modine Manufacturing and Bowen Acquisition
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Modine and Bowen is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and Bowen Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowen Acquisition Corp and Modine Manufacturing 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 Modine Manufacturing are associated (or correlated) with Bowen Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowen Acquisition Corp has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and Bowen Acquisition go up and down completely randomly.
Pair Corralation between Modine Manufacturing and Bowen Acquisition
Considering the 90-day investment horizon Modine Manufacturing is expected to under-perform the Bowen Acquisition. In addition to that, Modine Manufacturing is 10.46 times more volatile than Bowen Acquisition Corp. It trades about -0.19 of its total potential returns per unit of risk. Bowen Acquisition Corp is currently generating about -0.07 per unit of volatility. If you would invest 1,095 in Bowen Acquisition Corp on October 14, 2024 and sell it today you would lose (4.00) from holding Bowen Acquisition Corp or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Modine Manufacturing vs. Bowen Acquisition Corp
Performance |
| Timeline |
| Modine Manufacturing |
| Bowen Acquisition Corp |
Modine Manufacturing and Bowen Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modine Manufacturing and Bowen Acquisition
The main advantage of trading using opposite Modine Manufacturing and Bowen Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing position performs unexpectedly, Bowen Acquisition 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 Bowen Acquisition will offset losses from the drop in Bowen Acquisition's long position.| Modine Manufacturing vs. Cooper Stnd | Modine Manufacturing vs. Motorcar Parts of | Modine Manufacturing vs. American Axle Manufacturing | Modine Manufacturing vs. Stoneridge |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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