Correlation Between Modine Manufacturing and Optec International
Can any of the company-specific risk be diversified away by investing in both Modine Manufacturing and Optec International 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 Optec International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modine Manufacturing and Optec International, you can compare the effects of market volatilities on Modine Manufacturing and Optec International 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 Optec International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and Optec International.
Diversification Opportunities for Modine Manufacturing and Optec International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Modine and Optec is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and Optec International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optec International 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 Optec International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optec International has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and Optec International go up and down completely randomly.
Pair Corralation between Modine Manufacturing and Optec International
If you would invest 2,441 in Modine Manufacturing on November 19, 2024 and sell it today you would earn a total of 6,827 from holding Modine Manufacturing or generate 279.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Modine Manufacturing vs. Optec International
Performance |
| Timeline |
| Modine Manufacturing |
| Optec International |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Modine Manufacturing and Optec International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modine Manufacturing and Optec International
The main advantage of trading using opposite Modine Manufacturing and Optec International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing position performs unexpectedly, Optec International 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 Optec International will offset losses from the drop in Optec International's long position.| Modine Manufacturing vs. Cooper Stnd | Modine Manufacturing vs. Motorcar Parts of | Modine Manufacturing vs. American Axle Manufacturing | Modine Manufacturing vs. Stoneridge |
| Optec International vs. Service Team | Optec International vs. American Axle Manufacturing | Optec International vs. Modine Manufacturing | Optec International vs. Aeye 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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