Correlation Between Wabash National and Surf Air
Can any of the company-specific risk be diversified away by investing in both Wabash National and Surf Air 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 Surf Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wabash National and Surf Air Mobility, you can compare the effects of market volatilities on Wabash National and Surf Air 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 Surf Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wabash National and Surf Air.
Diversification Opportunities for Wabash National and Surf Air
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wabash and Surf is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Wabash National and Surf Air Mobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surf Air Mobility 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 Surf Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surf Air Mobility has no effect on the direction of Wabash National i.e., Wabash National and Surf Air go up and down completely randomly.
Pair Corralation between Wabash National and Surf Air
Considering the 90-day investment horizon Wabash National is expected to generate 7.19 times less return on investment than Surf Air. But when comparing it to its historical volatility, Wabash National is 5.47 times less risky than Surf Air. It trades about 0.29 of its potential returns per unit of risk. Surf Air Mobility is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 178.00 in Surf Air Mobility on September 2, 2024 and sell it today you would earn a total of 223.00 from holding Surf Air Mobility or generate 125.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wabash National vs. Surf Air Mobility
Performance |
| Timeline |
| Wabash National |
| Surf Air Mobility |
Wabash National and Surf Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wabash National and Surf Air
The main advantage of trading using opposite Wabash National and Surf Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabash National position performs unexpectedly, Surf Air 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 Surf Air will offset losses from the drop in Surf Air's long position.| Wabash National vs. Rev Group | Wabash National vs. Gencor Industries | Wabash National vs. Alamo Group | Wabash National vs. Columbus McKinnon |
| Surf Air vs. Ryanair Holdings PLC | Surf Air vs. Vishay Intertechnology | Surf Air vs. IPG Photonics | Surf Air vs. Arm Holdings plc |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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