Correlation Between Modine Manufacturing and SAIHEAT
Can any of the company-specific risk be diversified away by investing in both Modine Manufacturing and SAIHEAT 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 SAIHEAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modine Manufacturing and SAIHEAT Limited, you can compare the effects of market volatilities on Modine Manufacturing and SAIHEAT 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 SAIHEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and SAIHEAT.
Diversification Opportunities for Modine Manufacturing and SAIHEAT
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Modine and SAIHEAT is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and SAIHEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIHEAT Limited 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 SAIHEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIHEAT Limited has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and SAIHEAT go up and down completely randomly.
Pair Corralation between Modine Manufacturing and SAIHEAT
Considering the 90-day investment horizon Modine Manufacturing is expected to generate 0.36 times more return on investment than SAIHEAT. However, Modine Manufacturing is 2.81 times less risky than SAIHEAT. It trades about 0.29 of its potential returns per unit of risk. SAIHEAT Limited is currently generating about -0.13 per unit of risk. If you would invest 11,802 in Modine Manufacturing on October 20, 2024 and sell it today you would earn a total of 1,478 from holding Modine Manufacturing or generate 12.52% 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. SAIHEAT Limited
Performance |
| Timeline |
| Modine Manufacturing |
| SAIHEAT Limited |
Modine Manufacturing and SAIHEAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modine Manufacturing and SAIHEAT
The main advantage of trading using opposite Modine Manufacturing and SAIHEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing position performs unexpectedly, SAIHEAT 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 SAIHEAT will offset losses from the drop in SAIHEAT's long position.| Modine Manufacturing vs. Cooper Stnd | Modine Manufacturing vs. Motorcar Parts of | Modine Manufacturing vs. American Axle Manufacturing | Modine Manufacturing vs. Stoneridge |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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