Correlation Between Winnebago Industries and Curtiss Motorcycles
Can any of the company-specific risk be diversified away by investing in both Winnebago Industries and Curtiss Motorcycles 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 Winnebago Industries and Curtiss Motorcycles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winnebago Industries and Curtiss Motorcycles, you can compare the effects of market volatilities on Winnebago Industries and Curtiss Motorcycles 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 Winnebago Industries with a short position of Curtiss Motorcycles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winnebago Industries and Curtiss Motorcycles.
Diversification Opportunities for Winnebago Industries and Curtiss Motorcycles
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Winnebago and Curtiss is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Winnebago Industries and Curtiss Motorcycles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Motorcycles and Winnebago Industries 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 Winnebago Industries are associated (or correlated) with Curtiss Motorcycles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curtiss Motorcycles has no effect on the direction of Winnebago Industries i.e., Winnebago Industries and Curtiss Motorcycles go up and down completely randomly.
Pair Corralation between Winnebago Industries and Curtiss Motorcycles
Considering the 90-day investment horizon Winnebago Industries is expected to generate 5.72 times less return on investment than Curtiss Motorcycles. But when comparing it to its historical volatility, Winnebago Industries is 7.77 times less risky than Curtiss Motorcycles. It trades about 0.2 of its potential returns per unit of risk. Curtiss Motorcycles is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Curtiss Motorcycles on August 24, 2024 and sell it today you would earn a total of 1.00 from holding Curtiss Motorcycles or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Winnebago Industries vs. Curtiss Motorcycles
Performance |
| Timeline |
| Winnebago Industries |
| Curtiss Motorcycles |
Winnebago Industries and Curtiss Motorcycles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winnebago Industries and Curtiss Motorcycles
The main advantage of trading using opposite Winnebago Industries and Curtiss Motorcycles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winnebago Industries position performs unexpectedly, Curtiss Motorcycles 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 Curtiss Motorcycles will offset losses from the drop in Curtiss Motorcycles' long position.| Winnebago Industries vs. LCI Industries | Winnebago Industries vs. Brunswick | Winnebago Industries vs. Polaris Industries | Winnebago Industries vs. Marine Products |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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