Correlation Between Manitowoc and Lindsay
Can any of the company-specific risk be diversified away by investing in both Manitowoc and Lindsay 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 Lindsay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manitowoc and Lindsay, you can compare the effects of market volatilities on Manitowoc and Lindsay 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 Lindsay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitowoc and Lindsay.
Diversification Opportunities for Manitowoc and Lindsay
Poor diversification
The 3 months correlation between Manitowoc and Lindsay is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Manitowoc and Lindsay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsay 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 Lindsay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsay has no effect on the direction of Manitowoc i.e., Manitowoc and Lindsay go up and down completely randomly.
Pair Corralation between Manitowoc and Lindsay
Considering the 90-day investment horizon Manitowoc is expected to generate 1.23 times less return on investment than Lindsay. In addition to that, Manitowoc is 1.69 times more volatile than Lindsay. It trades about 0.1 of its total potential returns per unit of risk. Lindsay is currently generating about 0.21 per unit of volatility. If you would invest 11,391 in Lindsay on August 24, 2024 and sell it today you would earn a total of 1,681 from holding Lindsay or generate 14.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manitowoc vs. Lindsay
Performance |
| Timeline |
| Manitowoc |
| Lindsay |
Manitowoc and Lindsay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manitowoc and Lindsay
The main advantage of trading using opposite Manitowoc and Lindsay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitowoc position performs unexpectedly, Lindsay 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 Lindsay will offset losses from the drop in Lindsay's long position.| Manitowoc vs. Oshkosh | Manitowoc vs. Alamo Group | Manitowoc vs. Wabash National | Manitowoc vs. Hyster Yale Materials Handling |
| Lindsay vs. Columbus McKinnon | Lindsay vs. Astec Industries | Lindsay vs. Shyft Group | Lindsay vs. AGCO Corporation |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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