Correlation Between Wabash National and Urban Gro
Can any of the company-specific risk be diversified away by investing in both Wabash National and Urban Gro 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 Urban Gro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wabash National and Urban Gro, you can compare the effects of market volatilities on Wabash National and Urban Gro 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 Urban Gro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wabash National and Urban Gro.
Diversification Opportunities for Wabash National and Urban Gro
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wabash and Urban is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Wabash National and Urban Gro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urban Gro 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 Urban Gro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urban Gro has no effect on the direction of Wabash National i.e., Wabash National and Urban Gro go up and down completely randomly.
Pair Corralation between Wabash National and Urban Gro
Considering the 90-day investment horizon Wabash National is expected to generate 0.37 times more return on investment than Urban Gro. However, Wabash National is 2.72 times less risky than Urban Gro. It trades about 0.18 of its potential returns per unit of risk. Urban Gro is currently generating about -0.05 per unit of risk. If you would invest 1,849 in Wabash National on August 28, 2024 and sell it today you would earn a total of 159.00 from holding Wabash National or generate 8.6% 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. Urban Gro
Performance |
| Timeline |
| Wabash National |
| Urban Gro |
Wabash National and Urban Gro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wabash National and Urban Gro
The main advantage of trading using opposite Wabash National and Urban Gro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabash National position performs unexpectedly, Urban Gro 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 Urban Gro will offset losses from the drop in Urban Gro's long position.| Wabash National vs. Rev Group | Wabash National vs. Gencor Industries | Wabash National vs. Alamo Group | Wabash National vs. Columbus McKinnon |
| Urban Gro vs. Nikola Corp | Urban Gro vs. Wabash National | Urban Gro vs. American Premium Water | Urban Gro vs. Titan International |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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