Correlation Between Wabash National and Shyft
Can any of the company-specific risk be diversified away by investing in both Wabash National and Shyft 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 Wabash National and Shyft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wabash National and The Shyft Group, you can compare the effects of market volatilities on Wabash National and Shyft 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 Wabash National with a short position of Shyft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wabash National and Shyft.
Diversification Opportunities for Wabash National and Shyft
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wabash and Shyft is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Wabash National and The Shyft Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shyft Group and Wabash National 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 Wabash National are associated (or correlated) with Shyft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shyft Group has no effect on the direction of Wabash National i.e., Wabash National and Shyft go up and down completely randomly.
Pair Corralation between Wabash National and Shyft
Assuming the 90 days horizon Wabash National is expected to under-perform the Shyft. But the stock apears to be less risky and, when comparing its historical volatility, Wabash National is 1.47 times less risky than Shyft. The stock trades about -0.02 of its potential returns per unit of risk. The The Shyft Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,041 in The Shyft Group on September 3, 2024 and sell it today you would earn a total of 289.00 from holding The Shyft Group or generate 27.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wabash National vs. The Shyft Group
Performance |
| Timeline |
| Wabash National |
| Shyft Group |
Wabash National and Shyft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wabash National and Shyft
The main advantage of trading using opposite Wabash National and Shyft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabash National position performs unexpectedly, Shyft 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 Shyft will offset losses from the drop in Shyft's long position.| Wabash National vs. PENN NATL GAMING | Wabash National vs. National Health Investors | Wabash National vs. GameStop Corp | Wabash National vs. Penn National Gaming |
| Shyft vs. Hyster Yale Materials Handling | Shyft vs. Superior Plus Corp | Shyft vs. NMI Holdings | Shyft vs. Origin Agritech |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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