Correlation Between Modine Manufacturing and Cooper Stnd
Can any of the company-specific risk be diversified away by investing in both Modine Manufacturing and Cooper Stnd 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 Cooper Stnd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modine Manufacturing and Cooper Stnd, you can compare the effects of market volatilities on Modine Manufacturing and Cooper Stnd 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 Cooper Stnd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and Cooper Stnd.
Diversification Opportunities for Modine Manufacturing and Cooper Stnd
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Modine and Cooper is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and Cooper Stnd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Stnd 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 Cooper Stnd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Stnd has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and Cooper Stnd go up and down completely randomly.
Pair Corralation between Modine Manufacturing and Cooper Stnd
Considering the 90-day investment horizon Modine Manufacturing is expected to under-perform the Cooper Stnd. In addition to that, Modine Manufacturing is 2.3 times more volatile than Cooper Stnd. It trades about -0.09 of its total potential returns per unit of risk. Cooper Stnd is currently generating about 0.3 per unit of volatility. If you would invest 1,343 in Cooper Stnd on November 2, 2024 and sell it today you would earn a total of 235.00 from holding Cooper Stnd or generate 17.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Modine Manufacturing vs. Cooper Stnd
Performance |
| Timeline |
| Modine Manufacturing |
| Cooper Stnd |
Modine Manufacturing and Cooper Stnd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modine Manufacturing and Cooper Stnd
The main advantage of trading using opposite Modine Manufacturing and Cooper Stnd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing position performs unexpectedly, Cooper Stnd 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 Cooper Stnd will offset losses from the drop in Cooper Stnd's long position.| Modine Manufacturing vs. Cooper Stnd | Modine Manufacturing vs. Motorcar Parts of | Modine Manufacturing vs. American Axle Manufacturing | Modine Manufacturing vs. Stoneridge |
| Cooper Stnd vs. Dorman Products | Cooper Stnd vs. Monro Muffler Brake | Cooper Stnd vs. Standard Motor Products | Cooper Stnd 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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