Correlation Between Lindsay and Manitowoc

Can any of the company-specific risk be diversified away by investing in both Lindsay and Manitowoc 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 Lindsay and Manitowoc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lindsay and Manitowoc, you can compare the effects of market volatilities on Lindsay and Manitowoc 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 Lindsay with a short position of Manitowoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsay and Manitowoc.

Diversification Opportunities for Lindsay and Manitowoc

0.68

Correlation Coefficient

Lindsay  Manitowoc

Poor diversification

The 3 months correlation between Lindsay and Manitowoc is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lindsay and Manitowoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manitowoc and Lindsay 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 Lindsay are associated (or correlated) with Manitowoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manitowoc has no effect on the direction of Lindsay i.e., Lindsay and Manitowoc go up and down completely randomly.

Pair Corralation between Lindsay and Manitowoc

Considering the 90-day investment horizon Lindsay is expected to generate 0.45 times more return on investment than Manitowoc. However, Lindsay is 2.22 times less risky than Manitowoc. It trades about 0.12 of its potential returns per unit of risk. Manitowoc is currently generating about 0.02 per unit of risk. If you would invest  11,821  in Lindsay on December 29, 2024 and sell it today you would earn a total of  1,277  from holding Lindsay or generate 10.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Lindsay  vs.  Manitowoc

Lindsay

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lindsay are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Lindsay may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Manitowoc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Manitowoc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Manitowoc is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Lindsay and Manitowoc

The main advantage of trading using opposite Lindsay and Manitowoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsay position performs unexpectedly, Manitowoc 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 Manitowoc will offset losses from the drop in Manitowoc's long position.

The idea behind Lindsay and Manitowoc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.