Correlation Between Modine Manufacturing and Zapata Computing
Can any of the company-specific risk be diversified away by investing in both Modine Manufacturing and Zapata Computing 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 Zapata Computing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modine Manufacturing and Zapata Computing Holdings, you can compare the effects of market volatilities on Modine Manufacturing and Zapata Computing 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 Zapata Computing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and Zapata Computing.
Diversification Opportunities for Modine Manufacturing and Zapata Computing
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Modine and Zapata is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and Zapata Computing Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zapata Computing Holdings 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 Zapata Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zapata Computing Holdings has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and Zapata Computing go up and down completely randomly.
Pair Corralation between Modine Manufacturing and Zapata Computing
Considering the 90-day investment horizon Modine Manufacturing is expected to generate 4.19 times less return on investment than Zapata Computing. But when comparing it to its historical volatility, Modine Manufacturing is 10.84 times less risky than Zapata Computing. It trades about 0.11 of its potential returns per unit of risk. Zapata Computing Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 29.00 in Zapata Computing Holdings on September 4, 2024 and sell it today you would lose (28.44) from holding Zapata Computing Holdings or give up 98.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 83.1% |
| Values | Daily Returns |
Modine Manufacturing vs. Zapata Computing Holdings
Performance |
| Timeline |
| Modine Manufacturing |
| Zapata Computing Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Modine Manufacturing and Zapata Computing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Modine Manufacturing and Zapata Computing
The main advantage of trading using opposite Modine Manufacturing and Zapata Computing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing position performs unexpectedly, Zapata Computing 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 Zapata Computing will offset losses from the drop in Zapata Computing's long position.| Modine Manufacturing vs. Cooper Stnd | Modine Manufacturing vs. Motorcar Parts of | Modine Manufacturing vs. American Axle Manufacturing | Modine Manufacturing vs. Stoneridge |
| Zapata Computing vs. FormFactor | Zapata Computing vs. Paysafe | Zapata Computing vs. Uber Technologies | Zapata Computing vs. Minerals Technologies |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |