Correlation Between Modine Manufacturing and ECARX Holdings
Can any of the company-specific risk be diversified away by investing in both Modine Manufacturing and ECARX Holdings 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 ECARX Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modine Manufacturing and ECARX Holdings Warrants, you can compare the effects of market volatilities on Modine Manufacturing and ECARX Holdings 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 ECARX Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and ECARX Holdings.
Diversification Opportunities for Modine Manufacturing and ECARX Holdings
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Modine and ECARX is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and ECARX Holdings Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECARX Holdings Warrants 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 ECARX Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECARX Holdings Warrants has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and ECARX Holdings go up and down completely randomly.
Pair Corralation between Modine Manufacturing and ECARX Holdings
Considering the 90-day investment horizon Modine Manufacturing is expected to under-perform the ECARX Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Modine Manufacturing is 4.84 times less risky than ECARX Holdings. The stock trades about -0.1 of its potential returns per unit of risk. The ECARX Holdings Warrants is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 4.00 in ECARX Holdings Warrants on November 28, 2024 and sell it today you would earn a total of 4.00 from holding ECARX Holdings Warrants or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
Modine Manufacturing vs. ECARX Holdings Warrants
Performance |
| Timeline |
| Modine Manufacturing |
| ECARX Holdings Warrants |
Modine Manufacturing and ECARX Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modine Manufacturing and ECARX Holdings
The main advantage of trading using opposite Modine Manufacturing and ECARX Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing position performs unexpectedly, ECARX Holdings 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 ECARX Holdings will offset losses from the drop in ECARX Holdings' long position.| Modine Manufacturing vs. Cooper Stnd | Modine Manufacturing vs. Motorcar Parts of | Modine Manufacturing vs. American Axle Manufacturing | Modine Manufacturing vs. Stoneridge |
| ECARX Holdings vs. ECARX Holdings Class | ECARX Holdings vs. Bridger Aerospace Group | ECARX Holdings vs. NewAmsterdam Pharma | ECARX Holdings vs. Gorilla Technology Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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