Correlation Between Winnebago Industries and Marine Products
Can any of the company-specific risk be diversified away by investing in both Winnebago Industries and Marine Products 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 Marine Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winnebago Industries and Marine Products, you can compare the effects of market volatilities on Winnebago Industries and Marine Products 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 Marine Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winnebago Industries and Marine Products.
Diversification Opportunities for Winnebago Industries and Marine Products
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Winnebago and Marine is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Winnebago Industries and Marine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Products 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 Marine Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Products has no effect on the direction of Winnebago Industries i.e., Winnebago Industries and Marine Products go up and down completely randomly.
Pair Corralation between Winnebago Industries and Marine Products
Considering the 90-day investment horizon Winnebago Industries is expected to under-perform the Marine Products. But the stock apears to be less risky and, when comparing its historical volatility, Winnebago Industries is 1.17 times less risky than Marine Products. The stock trades about -0.02 of its potential returns per unit of risk. The Marine Products is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,186 in Marine Products on November 7, 2024 and sell it today you would lose (269.00) from holding Marine Products or give up 22.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Winnebago Industries vs. Marine Products
Performance |
| Timeline |
| Winnebago Industries |
| Marine Products |
Winnebago Industries and Marine Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winnebago Industries and Marine Products
The main advantage of trading using opposite Winnebago Industries and Marine Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winnebago Industries position performs unexpectedly, Marine Products 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 Marine Products will offset losses from the drop in Marine Products' long position.| Winnebago Industries vs. LCI Industries | Winnebago Industries vs. Brunswick | Winnebago Industries vs. Polaris Industries | Winnebago Industries vs. Marine Products |
| Marine Products vs. Thor Industries | Marine Products vs. BRP Inc | Marine Products vs. Brunswick | Marine Products vs. EZGO Technologies |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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