Correlation Between Lightning EMotors and Wabash National
Can any of the company-specific risk be diversified away by investing in both Lightning EMotors and Wabash National 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 Wabash National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lightning EMotors and Wabash National, you can compare the effects of market volatilities on Lightning EMotors and Wabash National 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 Wabash National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lightning EMotors and Wabash National.
Diversification Opportunities for Lightning EMotors and Wabash National
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lightning and Wabash is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lightning EMotors and Wabash National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wabash National 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 Wabash National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wabash National has no effect on the direction of Lightning EMotors i.e., Lightning EMotors and Wabash National go up and down completely randomly.
Pair Corralation between Lightning EMotors and Wabash National
If you would invest 1,849 in Wabash National on August 27, 2024 and sell it today you would earn a total of 82.00 from holding Wabash National or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Lightning EMotors vs. Wabash National
Performance |
| Timeline |
| Lightning EMotors |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Wabash National |
Lightning EMotors and Wabash National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lightning EMotors and Wabash National
The main advantage of trading using opposite Lightning EMotors and Wabash National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lightning EMotors position performs unexpectedly, Wabash National 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 Wabash National will offset losses from the drop in Wabash National'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 |
| Wabash National vs. Rev Group | Wabash National vs. Gencor Industries | Wabash National vs. Alamo Group | Wabash National vs. Columbus McKinnon |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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