Correlation Between Manitowoc and Komatsu
Can any of the company-specific risk be diversified away by investing in both Manitowoc and Komatsu 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 Manitowoc and Komatsu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manitowoc and Komatsu, you can compare the effects of market volatilities on Manitowoc and Komatsu 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 Manitowoc with a short position of Komatsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitowoc and Komatsu.
Diversification Opportunities for Manitowoc and Komatsu
Modest diversification
The 3 months correlation between Manitowoc and Komatsu is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Manitowoc and Komatsu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komatsu and Manitowoc 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 Manitowoc are associated (or correlated) with Komatsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komatsu has no effect on the direction of Manitowoc i.e., Manitowoc and Komatsu go up and down completely randomly.
Pair Corralation between Manitowoc and Komatsu
Considering the 90-day investment horizon Manitowoc is expected to generate 4.17 times more return on investment than Komatsu. However, Manitowoc is 4.17 times more volatile than Komatsu. It trades about 0.12 of its potential returns per unit of risk. Komatsu is currently generating about 0.04 per unit of risk. If you would invest 965.00 in Manitowoc on August 24, 2024 and sell it today you would earn a total of 116.00 from holding Manitowoc or generate 12.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manitowoc vs. Komatsu
Performance |
| Timeline |
| Manitowoc |
| Komatsu |
Manitowoc and Komatsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manitowoc and Komatsu
The main advantage of trading using opposite Manitowoc and Komatsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitowoc position performs unexpectedly, Komatsu 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 Komatsu will offset losses from the drop in Komatsu's long position.| Manitowoc vs. Oshkosh | Manitowoc vs. Alamo Group | Manitowoc vs. Wabash National | Manitowoc vs. Hyster Yale Materials Handling |
| Komatsu vs. Element Solutions | Komatsu vs. Orion Engineered Carbons | Komatsu vs. Minerals Technologies | Komatsu vs. Ingevity Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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