Correlation Between Modine Manufacturing and NESNVX

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

By analyzing existing cross correlation between Modine Manufacturing and NESNVX 4 12 SEP 25, you can compare the effects of market volatilities on Modine Manufacturing and NESNVX 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 NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and NESNVX.

Diversification Opportunities for Modine Manufacturing and NESNVX

-0.11

Correlation Coefficient

Modine Manufacturing  NESNVX

Good diversification

The 3 months correlation between Modine and NESNVX is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and NESNVX 4 12 SEP 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 4 12 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 NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 4 12 has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and NESNVX go up and down completely randomly.

Pair Corralation between Modine Manufacturing and NESNVX

Considering the 90-day investment horizon Modine Manufacturing is expected to generate 2.62 times more return on investment than NESNVX. However, Modine Manufacturing is 2.62 times more volatile than NESNVX 4 12 SEP 25. It trades about 0.44 of its potential returns per unit of risk. NESNVX 4 12 SEP 25 is currently generating about -0.03 per unit of risk. If you would invest  11,858  in Modine Manufacturing on October 25, 2024 and sell it today you would earn a total of  2,410  from holding Modine Manufacturing or generate 20.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	50.0%
Values	Daily Returns

Modine Manufacturing  vs.  NESNVX 4 12 SEP 25

Modine Manufacturing

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Modine Manufacturing are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Modine Manufacturing exhibited solid returns over the last few months and may actually be approaching a breakup point.

NESNVX 4 12

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 4 12 SEP 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NESNVX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Modine Manufacturing and NESNVX

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

The idea behind Modine Manufacturing and NESNVX 4 12 SEP 25 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..