Correlation Between Manitowoc and Saker Aviation
Can any of the company-specific risk be diversified away by investing in both Manitowoc and Saker Aviation 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 Saker Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manitowoc and Saker Aviation Services, you can compare the effects of market volatilities on Manitowoc and Saker Aviation 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 Saker Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitowoc and Saker Aviation.
Diversification Opportunities for Manitowoc and Saker Aviation
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Manitowoc and Saker is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Manitowoc and Saker Aviation Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saker Aviation Services 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 Saker Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saker Aviation Services has no effect on the direction of Manitowoc i.e., Manitowoc and Saker Aviation go up and down completely randomly.
Pair Corralation between Manitowoc and Saker Aviation
Considering the 90-day investment horizon Manitowoc is expected to generate 0.53 times more return on investment than Saker Aviation. However, Manitowoc is 1.9 times less risky than Saker Aviation. It trades about 0.2 of its potential returns per unit of risk. Saker Aviation Services is currently generating about -0.1 per unit of risk. If you would invest 890.00 in Manitowoc on September 2, 2024 and sell it today you would earn a total of 173.00 from holding Manitowoc or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manitowoc vs. Saker Aviation Services
Performance |
| Timeline |
| Manitowoc |
| Saker Aviation Services |
Manitowoc and Saker Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manitowoc and Saker Aviation
The main advantage of trading using opposite Manitowoc and Saker Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitowoc position performs unexpectedly, Saker Aviation 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 Saker Aviation will offset losses from the drop in Saker Aviation's long position.| Manitowoc vs. Oshkosh | Manitowoc vs. Alamo Group | Manitowoc vs. Wabash National | Manitowoc vs. Hyster Yale Materials Handling |
| Saker Aviation vs. Seychelle Environmtl | Saker Aviation vs. Energy and Water | Saker Aviation vs. One World Universe | Saker Aviation vs. Vow ASA |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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