Correlation Between Wabash National and Kion Group
Can any of the company-specific risk be diversified away by investing in both Wabash National and Kion Group 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 Kion Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wabash National and Kion Group AG, you can compare the effects of market volatilities on Wabash National and Kion Group 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 Kion Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wabash National and Kion Group.
Diversification Opportunities for Wabash National and Kion Group
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wabash and Kion is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Wabash National and Kion Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kion Group AG 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 Kion Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kion Group AG has no effect on the direction of Wabash National i.e., Wabash National and Kion Group go up and down completely randomly.
Pair Corralation between Wabash National and Kion Group
Considering the 90-day investment horizon Wabash National is expected to generate 0.89 times more return on investment than Kion Group. However, Wabash National is 1.13 times less risky than Kion Group. It trades about 0.07 of its potential returns per unit of risk. Kion Group AG is currently generating about 0.05 per unit of risk. If you would invest 1,871 in Wabash National on September 12, 2024 and sell it today you would earn a total of 155.00 from holding Wabash National or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wabash National vs. Kion Group AG
Performance |
| Timeline |
| Wabash National |
| Kion Group AG |
Wabash National and Kion Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wabash National and Kion Group
The main advantage of trading using opposite Wabash National and Kion Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabash National position performs unexpectedly, Kion Group 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 Kion Group will offset losses from the drop in Kion Group's long position.| Wabash National vs. Manitowoc | Wabash National vs. Terex | Wabash National vs. Alamo Group | Wabash National vs. AGCO Corporation |
| Kion Group vs. Rev Group | Kion Group vs. Gencor Industries | Kion Group vs. Alamo Group | Kion Group vs. Wabash National |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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