Correlation Between 629377CE0 and Wabash National

Can any of the company-specific risk be diversified away by investing in both 629377CE0 and Wabash National 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 629377CE0 and Wabash National into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NRG Energy 575 and Wabash National, you can compare the effects of market volatilities on 629377CE0 and Wabash National 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 629377CE0 with a short position of Wabash National. Check out your portfolio center. Please also check ongoing floating volatility patterns of 629377CE0 and Wabash National.

Diversification Opportunities for 629377CE0 and Wabash National

0.23

Correlation Coefficient

629377CE0  Wabash National

Modest diversification

The 3 months correlation between 629377CE0 and Wabash is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding NRG Energy 575 and Wabash National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wabash National and 629377CE0 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 NRG Energy 575 are associated (or correlated) with Wabash National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wabash National has no effect on the direction of 629377CE0 i.e., 629377CE0 and Wabash National go up and down completely randomly.

Pair Corralation between 629377CE0 and Wabash National

Assuming the 90 days trading horizon NRG Energy 575 is expected to generate 0.27 times more return on investment than Wabash National. However, NRG Energy 575 is 3.73 times less risky than Wabash National. It trades about -0.12 of its potential returns per unit of risk. Wabash National is currently generating about -0.24 per unit of risk. If you would invest  9,975  in NRG Energy 575 on December 25, 2024 and sell it today you would lose (587.00) from holding NRG Energy 575 or give up 5.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.72%
Values	Daily Returns

NRG Energy 575  vs.  Wabash National

NRG Energy 575

Risk-Adjusted Performance

Very Weak

Over the last 90 days NRG Energy 575 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 629377CE0 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Wabash National

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wabash National has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile 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.

Pair Trading with 629377CE0 and Wabash National

The main advantage of trading using opposite 629377CE0 and Wabash National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 629377CE0 position performs unexpectedly, Wabash National 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 Wabash National will offset losses from the drop in Wabash National's long position.

The idea behind NRG Energy 575 and Wabash National 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.