Correlation Between Winnebago Industries and Fox Factory
Can any of the company-specific risk be diversified away by investing in both Winnebago Industries and Fox Factory 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 Fox Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winnebago Industries and Fox Factory Holding, you can compare the effects of market volatilities on Winnebago Industries and Fox Factory 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 Fox Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winnebago Industries and Fox Factory.
Diversification Opportunities for Winnebago Industries and Fox Factory
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Winnebago and Fox is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Winnebago Industries and Fox Factory Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fox Factory Holding 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 Fox Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fox Factory Holding has no effect on the direction of Winnebago Industries i.e., Winnebago Industries and Fox Factory go up and down completely randomly.
Pair Corralation between Winnebago Industries and Fox Factory
Assuming the 90 days horizon Winnebago Industries is expected to under-perform the Fox Factory. In addition to that, Winnebago Industries is 1.49 times more volatile than Fox Factory Holding. It trades about -0.21 of its total potential returns per unit of risk. Fox Factory Holding is currently generating about -0.15 per unit of volatility. If you would invest 2,867 in Fox Factory Holding on October 19, 2024 and sell it today you would lose (126.00) from holding Fox Factory Holding or give up 4.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Winnebago Industries vs. Fox Factory Holding
Performance |
| Timeline |
| Winnebago Industries |
| Fox Factory Holding |
Winnebago Industries and Fox Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winnebago Industries and Fox Factory
The main advantage of trading using opposite Winnebago Industries and Fox Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winnebago Industries position performs unexpectedly, Fox Factory 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 Fox Factory will offset losses from the drop in Fox Factory's long position.| Winnebago Industries vs. DALATA HOTEL | Winnebago Industries vs. InterContinental Hotels Group | Winnebago Industries vs. PPHE HOTEL GROUP | Winnebago Industries vs. Japan Tobacco |
| Fox Factory vs. Harley Davidson | Fox Factory vs. Harley Davidson | Fox Factory vs. BRP Inc | Fox Factory vs. Thor Industries |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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