Correlation Between Lightning EMotors and Columbus McKinnon
Can any of the company-specific risk be diversified away by investing in both Lightning EMotors and Columbus McKinnon 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 Lightning EMotors and Columbus McKinnon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lightning EMotors and Columbus McKinnon, you can compare the effects of market volatilities on Lightning EMotors and Columbus McKinnon 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 Lightning EMotors with a short position of Columbus McKinnon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lightning EMotors and Columbus McKinnon.
Diversification Opportunities for Lightning EMotors and Columbus McKinnon
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lightning and Columbus is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lightning EMotors and Columbus McKinnon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbus McKinnon and Lightning EMotors 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 Lightning EMotors are associated (or correlated) with Columbus McKinnon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbus McKinnon has no effect on the direction of Lightning EMotors i.e., Lightning EMotors and Columbus McKinnon go up and down completely randomly.
Pair Corralation between Lightning EMotors and Columbus McKinnon
If you would invest 3,007 in Columbus McKinnon on September 12, 2024 and sell it today you would earn a total of 1,012 from holding Columbus McKinnon or generate 33.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.59% |
| Values | Daily Returns |
Lightning EMotors vs. Columbus McKinnon
Performance |
| Timeline |
| Lightning EMotors |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Columbus McKinnon |
Lightning EMotors and Columbus McKinnon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lightning EMotors and Columbus McKinnon
The main advantage of trading using opposite Lightning EMotors and Columbus McKinnon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lightning EMotors position performs unexpectedly, Columbus McKinnon 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 Columbus McKinnon will offset losses from the drop in Columbus McKinnon's long position.| Lightning EMotors vs. Lion Electric Corp | Lightning EMotors vs. American Premium Water | Lightning EMotors vs. Wabash National | Lightning EMotors vs. Titan International |
| Columbus McKinnon vs. Victory Integrity Smallmid Cap | Columbus McKinnon vs. Hilton Worldwide Holdings | Columbus McKinnon vs. NVIDIA | Columbus McKinnon vs. JPMorgan Chase Co |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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