Correlation Between Lindsay and Oshkosh

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

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

Diversification Opportunities for Lindsay and Oshkosh

0.36

Correlation Coefficient

Lindsay  Oshkosh

Weak diversification

The 3 months correlation between Lindsay and Oshkosh is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lindsay and Oshkosh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshkosh 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 Oshkosh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oshkosh has no effect on the direction of Lindsay i.e., Lindsay and Oshkosh go up and down completely randomly.

Pair Corralation between Lindsay and Oshkosh

Considering the 90-day investment horizon Lindsay is expected to generate 0.51 times more return on investment than Oshkosh. However, Lindsay is 1.97 times less risky than Oshkosh. It trades about 0.08 of its potential returns per unit of risk. Oshkosh is currently generating about 0.01 per unit of risk. If you would invest  12,456  in Lindsay on November 19, 2024 and sell it today you would earn a total of  851.00  from holding Lindsay or generate 6.83% return on investment over 90 days.

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

Lindsay  vs.  Oshkosh

Lindsay

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lindsay are ranked lower than 6 (%) 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 March 2025.

Oshkosh

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oshkosh are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Oshkosh is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Lindsay and Oshkosh

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

The idea behind Lindsay and Oshkosh 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..