Correlation Between Modine Manufacturing and MW Investment

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

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

Diversification Opportunities for Modine Manufacturing and MW Investment

0.0

Correlation Coefficient

Modine Manufacturing  MW Investment

Pay attention - limited upside

The 3 months correlation between Modine and MEGH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and MW Investment Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MW Investment Holding and Modine Manufacturing 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 Modine Manufacturing are associated (or correlated) with MW Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MW Investment Holding has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and MW Investment go up and down completely randomly.

Pair Corralation between Modine Manufacturing and MW Investment

If you would invest  0.02  in MW Investment Holding on December 17, 2024 and sell it today you would earn a total of  0.00  from holding MW Investment Holding or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Modine Manufacturing  vs.  MW Investment Holding

Modine Manufacturing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Modine Manufacturing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

MW Investment Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days MW Investment Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, MW Investment is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Modine Manufacturing and MW Investment

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

The idea behind Modine Manufacturing and MW Investment Holding 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.