Correlation Between Wabash National and Xiabuxiabu Catering
Can any of the company-specific risk be diversified away by investing in both Wabash National and Xiabuxiabu Catering 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 Xiabuxiabu Catering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wabash National and Xiabuxiabu Catering Management, you can compare the effects of market volatilities on Wabash National and Xiabuxiabu Catering 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 Xiabuxiabu Catering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wabash National and Xiabuxiabu Catering.
Diversification Opportunities for Wabash National and Xiabuxiabu Catering
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wabash and Xiabuxiabu is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Wabash National and Xiabuxiabu Catering Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiabuxiabu Catering 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 Xiabuxiabu Catering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiabuxiabu Catering has no effect on the direction of Wabash National i.e., Wabash National and Xiabuxiabu Catering go up and down completely randomly.
Pair Corralation between Wabash National and Xiabuxiabu Catering
Considering the 90-day investment horizon Wabash National is expected to generate 0.78 times more return on investment than Xiabuxiabu Catering. However, Wabash National is 1.28 times less risky than Xiabuxiabu Catering. It trades about -0.15 of its potential returns per unit of risk. Xiabuxiabu Catering Management is currently generating about -0.22 per unit of risk. If you would invest 1,684 in Wabash National on November 3, 2024 and sell it today you would lose (124.00) from holding Wabash National or give up 7.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Wabash National vs. Xiabuxiabu Catering Management
Performance |
| Timeline |
| Wabash National |
| Xiabuxiabu Catering |
Wabash National and Xiabuxiabu Catering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wabash National and Xiabuxiabu Catering
The main advantage of trading using opposite Wabash National and Xiabuxiabu Catering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabash National position performs unexpectedly, Xiabuxiabu Catering 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 Xiabuxiabu Catering will offset losses from the drop in Xiabuxiabu Catering's long position.| Wabash National vs. Rev Group | Wabash National vs. Gencor Industries | Wabash National vs. Alamo Group | Wabash National vs. Columbus McKinnon |
| Xiabuxiabu Catering vs. Griffon | Xiabuxiabu Catering vs. HomeTrust Bancshares | Xiabuxiabu Catering vs. Eddy Smart Home | Xiabuxiabu Catering vs. Kilroy Realty Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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