Correlation Between Volvo AB and Oshkosh
Can any of the company-specific risk be diversified away by investing in both Volvo AB and Oshkosh 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 Volvo AB and Oshkosh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volvo AB ser and Oshkosh, you can compare the effects of market volatilities on Volvo AB and Oshkosh 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 Volvo AB with a short position of Oshkosh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volvo AB and Oshkosh.
Diversification Opportunities for Volvo AB and Oshkosh
Good diversification
The 3 months correlation between Volvo and Oshkosh is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Volvo AB ser and Oshkosh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshkosh and Volvo AB 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 Volvo AB ser are associated (or correlated) with Oshkosh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oshkosh has no effect on the direction of Volvo AB i.e., Volvo AB and Oshkosh go up and down completely randomly.
Pair Corralation between Volvo AB and Oshkosh
Assuming the 90 days horizon Volvo AB is expected to generate 1.01 times less return on investment than Oshkosh. In addition to that, Volvo AB is 1.34 times more volatile than Oshkosh. It trades about 0.04 of its total potential returns per unit of risk. Oshkosh is currently generating about 0.06 per unit of volatility. If you would invest 8,238 in Oshkosh on August 31, 2024 and sell it today you would earn a total of 3,123 from holding Oshkosh or generate 37.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.05% |
| Values | Daily Returns |
Volvo AB ser vs. Oshkosh
Performance |
| Timeline |
| Volvo AB ser |
| Oshkosh |
Volvo AB and Oshkosh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volvo AB and Oshkosh
The main advantage of trading using opposite Volvo AB and Oshkosh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volvo AB position performs unexpectedly, Oshkosh 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 Oshkosh will offset losses from the drop in Oshkosh's long position.| Volvo AB vs. Daimler Truck Holding | Volvo AB vs. Oshkosh | Volvo AB vs. Hydrofarm Holdings Group | Volvo AB vs. Hino Motors Ltd |
| Oshkosh vs. Terex | Oshkosh vs. Astec Industries | Oshkosh vs. Hyster Yale Materials Handling | Oshkosh vs. Manitex International |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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