Correlation Between Modine Manufacturing and China Finance
Can any of the company-specific risk be diversified away by investing in both Modine Manufacturing and China Finance 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 China Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modine Manufacturing and China Finance, you can compare the effects of market volatilities on Modine Manufacturing and China Finance 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 China Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and China Finance.
Diversification Opportunities for Modine Manufacturing and China Finance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Modine and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and China Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Finance 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 China Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Finance has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and China Finance go up and down completely randomly.
Pair Corralation between Modine Manufacturing and China Finance
If you would invest 0.00 in China Finance on November 8, 2024 and sell it today you would earn a total of 0.00 from holding China Finance or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Modine Manufacturing vs. China Finance
Performance |
| Timeline |
| Modine Manufacturing |
| China Finance |
Modine Manufacturing and China Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modine Manufacturing and China Finance
The main advantage of trading using opposite Modine Manufacturing and China Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing position performs unexpectedly, China Finance 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 China Finance will offset losses from the drop in China Finance's long position.| Modine Manufacturing vs. Cooper Stnd | Modine Manufacturing vs. Motorcar Parts of | Modine Manufacturing vs. American Axle Manufacturing | Modine Manufacturing vs. Stoneridge |
| China Finance vs. Wizz Air Holdings | China Finance vs. Shagrir Group Vehicle | China Finance vs. HF Sinclair Corp | China Finance vs. BorgWarner |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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