Correlation Between Winnebago Industries and Harley Davidson
Can any of the company-specific risk be diversified away by investing in both Winnebago Industries and Harley Davidson 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 Harley Davidson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winnebago Industries and Harley Davidson, you can compare the effects of market volatilities on Winnebago Industries and Harley Davidson 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 Harley Davidson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winnebago Industries and Harley Davidson.
Diversification Opportunities for Winnebago Industries and Harley Davidson
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Winnebago and Harley is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Winnebago Industries and Harley Davidson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harley Davidson 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 Harley Davidson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harley Davidson has no effect on the direction of Winnebago Industries i.e., Winnebago Industries and Harley Davidson go up and down completely randomly.
Pair Corralation between Winnebago Industries and Harley Davidson
Assuming the 90 days horizon Winnebago Industries is expected to under-perform the Harley Davidson. In addition to that, Winnebago Industries is 1.23 times more volatile than Harley Davidson. It trades about -0.21 of its total potential returns per unit of risk. Harley Davidson is currently generating about -0.1 per unit of volatility. If you would invest 2,990 in Harley Davidson on October 19, 2024 and sell it today you would lose (115.00) from holding Harley Davidson or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Winnebago Industries vs. Harley Davidson
Performance |
| Timeline |
| Winnebago Industries |
| Harley Davidson |
Winnebago Industries and Harley Davidson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winnebago Industries and Harley Davidson
The main advantage of trading using opposite Winnebago Industries and Harley Davidson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winnebago Industries position performs unexpectedly, Harley Davidson 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 Harley Davidson will offset losses from the drop in Harley Davidson'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 |
| Harley Davidson vs. Harley Davidson | Harley Davidson vs. BRP Inc | Harley Davidson vs. Fox Factory Holding | Harley Davidson 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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