Correlation Between Modine Manufacturing and NexteGO NV
Can any of the company-specific risk be diversified away by investing in both Modine Manufacturing and NexteGO NV 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 NexteGO NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modine Manufacturing and NexteGO NV Ordinary, you can compare the effects of market volatilities on Modine Manufacturing and NexteGO NV 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 NexteGO NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and NexteGO NV.
Diversification Opportunities for Modine Manufacturing and NexteGO NV
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Modine and NexteGO is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and NexteGO NV Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexteGO NV Ordinary 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 NexteGO NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NexteGO NV Ordinary has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and NexteGO NV go up and down completely randomly.
Pair Corralation between Modine Manufacturing and NexteGO NV
Considering the 90-day investment horizon Modine Manufacturing is expected to generate 9.13 times less return on investment than NexteGO NV. But when comparing it to its historical volatility, Modine Manufacturing is 19.44 times less risky than NexteGO NV. It trades about 0.11 of its potential returns per unit of risk. NexteGO NV Ordinary is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 52.00 in NexteGO NV Ordinary on September 14, 2024 and sell it today you would lose (51.99) from holding NexteGO NV Ordinary or give up 99.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Modine Manufacturing vs. NexteGO NV Ordinary
Performance |
| Timeline |
| Modine Manufacturing |
| NexteGO NV Ordinary |
Modine Manufacturing and NexteGO NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modine Manufacturing and NexteGO NV
The main advantage of trading using opposite Modine Manufacturing and NexteGO NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing position performs unexpectedly, NexteGO NV 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 NexteGO NV will offset losses from the drop in NexteGO NV's long position.| Modine Manufacturing vs. Ford Motor | Modine Manufacturing vs. General Motors | Modine Manufacturing vs. Goodyear Tire Rubber | Modine Manufacturing vs. Li Auto |
| NexteGO NV vs. Sellas Life Sciences | NexteGO NV vs. Valneva SE ADR | NexteGO NV vs. Acumen Pharmaceuticals | NexteGO NV vs. Transocean |
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 Stocks Directory module to find actively traded stocks across global markets.
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