Correlation Between Winnebago Industries and LCI Industries
Can any of the company-specific risk be diversified away by investing in both Winnebago Industries and LCI Industries 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 LCI Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winnebago Industries and LCI Industries, you can compare the effects of market volatilities on Winnebago Industries and LCI Industries 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 LCI Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winnebago Industries and LCI Industries.
Diversification Opportunities for Winnebago Industries and LCI Industries
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Winnebago and LCI is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Winnebago Industries and LCI Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LCI Industries 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 LCI Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LCI Industries has no effect on the direction of Winnebago Industries i.e., Winnebago Industries and LCI Industries go up and down completely randomly.
Pair Corralation between Winnebago Industries and LCI Industries
Assuming the 90 days horizon Winnebago Industries is expected to under-perform the LCI Industries. In addition to that, Winnebago Industries is 1.14 times more volatile than LCI Industries. It trades about -0.21 of its total potential returns per unit of risk. LCI Industries is currently generating about 0.01 per unit of volatility. If you would invest 10,400 in LCI Industries on October 19, 2024 and sell it today you would earn a total of 0.00 from holding LCI Industries or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Winnebago Industries vs. LCI Industries
Performance |
| Timeline |
| Winnebago Industries |
| LCI Industries |
Winnebago Industries and LCI Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winnebago Industries and LCI Industries
The main advantage of trading using opposite Winnebago Industries and LCI Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winnebago Industries position performs unexpectedly, LCI Industries 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 LCI Industries will offset losses from the drop in LCI Industries' long position.| Winnebago Industries vs. DALATA HOTEL | Winnebago Industries vs. InterContinental Hotels Group | Winnebago Industries vs. PPHE HOTEL GROUP | Winnebago Industries vs. Japan Tobacco |
| LCI Industries vs. SYSTEMAIR AB | LCI Industries vs. Delta Air Lines | LCI Industries vs. FAIR ISAAC | LCI Industries vs. Air New Zealand |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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