Correlation Between Wabash National and Hino Motors
Can any of the company-specific risk be diversified away by investing in both Wabash National and Hino Motors 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 Wabash National and Hino Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wabash National and Hino Motors Ltd, you can compare the effects of market volatilities on Wabash National and Hino Motors 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 Wabash National with a short position of Hino Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wabash National and Hino Motors.
Diversification Opportunities for Wabash National and Hino Motors
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wabash and Hino is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Wabash National and Hino Motors Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hino Motors and Wabash National 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 Wabash National are associated (or correlated) with Hino Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hino Motors has no effect on the direction of Wabash National i.e., Wabash National and Hino Motors go up and down completely randomly.
Pair Corralation between Wabash National and Hino Motors
Considering the 90-day investment horizon Wabash National is expected to under-perform the Hino Motors. But the stock apears to be less risky and, when comparing its historical volatility, Wabash National is 1.4 times less risky than Hino Motors. The stock trades about -0.19 of its potential returns per unit of risk. The Hino Motors Ltd is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 3,016 in Hino Motors Ltd on November 28, 2024 and sell it today you would lose (246.00) from holding Hino Motors Ltd or give up 8.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wabash National vs. Hino Motors Ltd
Performance |
| Timeline |
| Wabash National |
| Hino Motors |
Wabash National and Hino Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wabash National and Hino Motors
The main advantage of trading using opposite Wabash National and Hino Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabash National position performs unexpectedly, Hino Motors 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 Hino Motors will offset losses from the drop in Hino Motors' long position.| Wabash National vs. Rev Group | Wabash National vs. Gencor Industries | Wabash National vs. Alamo Group | Wabash National vs. Columbus McKinnon |
| Hino Motors vs. Daimler Truck Holding | Hino Motors vs. Volvo AB ADR | Hino Motors vs. Columbus McKinnon | Hino Motors vs. Hyster Yale Materials Handling |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |