Correlation Between Modine Manufacturing and Highest Performances
Can any of the company-specific risk be diversified away by investing in both Modine Manufacturing and Highest Performances 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 Highest Performances into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modine Manufacturing and Highest Performances Holdings, you can compare the effects of market volatilities on Modine Manufacturing and Highest Performances 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 Highest Performances. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and Highest Performances.
Diversification Opportunities for Modine Manufacturing and Highest Performances
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Modine and Highest is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and Highest Performances Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highest Performances 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 Highest Performances. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highest Performances has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and Highest Performances go up and down completely randomly.
Pair Corralation between Modine Manufacturing and Highest Performances
Considering the 90-day investment horizon Modine Manufacturing is expected to generate 0.26 times more return on investment than Highest Performances. However, Modine Manufacturing is 3.81 times less risky than Highest Performances. It trades about 0.31 of its potential returns per unit of risk. Highest Performances Holdings is currently generating about -0.03 per unit of risk. If you would invest 11,748 in Modine Manufacturing on October 22, 2024 and sell it today you would earn a total of 1,532 from holding Modine Manufacturing or generate 13.04% 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. Highest Performances Holdings
Performance |
| Timeline |
| Modine Manufacturing |
| Highest Performances |
Modine Manufacturing and Highest Performances Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modine Manufacturing and Highest Performances
The main advantage of trading using opposite Modine Manufacturing and Highest Performances positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing position performs unexpectedly, Highest Performances 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 Highest Performances will offset losses from the drop in Highest Performances' long position.| Modine Manufacturing vs. Cooper Stnd | Modine Manufacturing vs. Motorcar Parts of | Modine Manufacturing vs. American Axle Manufacturing | Modine Manufacturing vs. Stoneridge |
| Highest Performances vs. Playtech plc | Highest Performances vs. BRP Inc | Highest Performances vs. Emerson Radio | Highest Performances vs. ANTA Sports Products |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |