Correlation Between Manitowoc and Oshkosh

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

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

Diversification Opportunities for Manitowoc and Oshkosh

0.68

Correlation Coefficient

Manitowoc  Oshkosh

Poor diversification

The 3 months correlation between Manitowoc and Oshkosh is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Manitowoc and Oshkosh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshkosh and Manitowoc 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 Manitowoc 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 Manitowoc i.e., Manitowoc and Oshkosh go up and down completely randomly.

Pair Corralation between Manitowoc and Oshkosh

Considering the 90-day investment horizon Manitowoc is expected to generate 1.12 times more return on investment than Oshkosh. However, Manitowoc is 1.12 times more volatile than Oshkosh. It trades about 0.02 of its potential returns per unit of risk. Oshkosh is currently generating about 0.02 per unit of risk. If you would invest  877.00  in Manitowoc on December 30, 2024 and sell it today you would earn a total of  12.00  from holding Manitowoc or generate 1.37% return on investment over 90 days.

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

Manitowoc  vs.  Oshkosh

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.

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 Manitowoc and Oshkosh

The main advantage of trading using opposite Manitowoc and Oshkosh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitowoc 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 Manitowoc 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.