Correlation Between Marketing Worldwide and Modine Manufacturing
Can any of the company-specific risk be diversified away by investing in both Marketing Worldwide and Modine Manufacturing 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 Marketing Worldwide and Modine Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marketing Worldwide and Modine Manufacturing, you can compare the effects of market volatilities on Marketing Worldwide and Modine Manufacturing 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 Marketing Worldwide with a short position of Modine Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marketing Worldwide and Modine Manufacturing.
Diversification Opportunities for Marketing Worldwide and Modine Manufacturing
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Marketing and Modine is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Marketing Worldwide and Modine Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modine Manufacturing and Marketing Worldwide 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 Marketing Worldwide are associated (or correlated) with Modine Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modine Manufacturing has no effect on the direction of Marketing Worldwide i.e., Marketing Worldwide and Modine Manufacturing go up and down completely randomly.
Pair Corralation between Marketing Worldwide and Modine Manufacturing
Given the investment horizon of 90 days Marketing Worldwide is expected to generate 7.47 times more return on investment than Modine Manufacturing. However, Marketing Worldwide is 7.47 times more volatile than Modine Manufacturing. It trades about 0.14 of its potential returns per unit of risk. Modine Manufacturing is currently generating about 0.04 per unit of risk. If you would invest 0.02 in Marketing Worldwide on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Marketing Worldwide or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Marketing Worldwide vs. Modine Manufacturing
Performance |
| Timeline |
| Marketing Worldwide |
| Modine Manufacturing |
Marketing Worldwide and Modine Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marketing Worldwide and Modine Manufacturing
The main advantage of trading using opposite Marketing Worldwide and Modine Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marketing Worldwide position performs unexpectedly, Modine Manufacturing 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 Modine Manufacturing will offset losses from the drop in Modine Manufacturing's long position.| Marketing Worldwide vs. Continental Aktiengesellschaft | Marketing Worldwide vs. Service Team | Marketing Worldwide vs. Compagnie Gnrale des | Marketing Worldwide vs. Dana Inc |
| Modine Manufacturing vs. Ford Motor | Modine Manufacturing vs. General Motors | Modine Manufacturing vs. Goodyear Tire Rubber | Modine Manufacturing vs. Li Auto |
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.
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