Correlation Between Modine Manufacturing and Jutal Offshore
Can any of the company-specific risk be diversified away by investing in both Modine Manufacturing and Jutal Offshore 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 Jutal Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modine Manufacturing and Jutal Offshore Oil, you can compare the effects of market volatilities on Modine Manufacturing and Jutal Offshore 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 Jutal Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and Jutal Offshore.
Diversification Opportunities for Modine Manufacturing and Jutal Offshore
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Modine and Jutal is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil 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 Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and Jutal Offshore go up and down completely randomly.
Pair Corralation between Modine Manufacturing and Jutal Offshore
Considering the 90-day investment horizon Modine Manufacturing is expected to generate 0.92 times more return on investment than Jutal Offshore. However, Modine Manufacturing is 1.09 times less risky than Jutal Offshore. It trades about 0.11 of its potential returns per unit of risk. Jutal Offshore Oil is currently generating about 0.03 per unit of risk. If you would invest 4,907 in Modine Manufacturing on September 4, 2024 and sell it today you would earn a total of 8,867 from holding Modine Manufacturing or generate 180.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Modine Manufacturing vs. Jutal Offshore Oil
Performance |
| Timeline |
| Modine Manufacturing |
| Jutal Offshore Oil |
Modine Manufacturing and Jutal Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modine Manufacturing and Jutal Offshore
The main advantage of trading using opposite Modine Manufacturing and Jutal Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing position performs unexpectedly, Jutal Offshore 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 Jutal Offshore will offset losses from the drop in Jutal Offshore's long position.| Modine Manufacturing vs. Cooper Stnd | Modine Manufacturing vs. Motorcar Parts of | Modine Manufacturing vs. American Axle Manufacturing | Modine Manufacturing vs. Stoneridge |
| Jutal Offshore vs. Expro Group Holdings | Jutal Offshore vs. ChampionX | Jutal Offshore vs. Ranger Energy Services | Jutal Offshore vs. Cactus Inc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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