Correlation Between Wabash National and 256746AJ7

Can any of the company-specific risk be diversified away by investing in both Wabash National and 256746AJ7 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 Wabash National and 256746AJ7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wabash National and DLTR 265 01 DEC 31, you can compare the effects of market volatilities on Wabash National and 256746AJ7 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 Wabash National with a short position of 256746AJ7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wabash National and 256746AJ7.

Diversification Opportunities for Wabash National and 256746AJ7

-0.4

Correlation Coefficient

Wabash National  256746AJ7

Very good diversification

The 3 months correlation between Wabash and 256746AJ7 is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Wabash National and DLTR 265 01 DEC 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DLTR 265 01 and Wabash National 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 Wabash National are associated (or correlated) with 256746AJ7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DLTR 265 01 has no effect on the direction of Wabash National i.e., Wabash National and 256746AJ7 go up and down completely randomly.

Pair Corralation between Wabash National and 256746AJ7

Considering the 90-day investment horizon Wabash National is expected to under-perform the 256746AJ7. In addition to that, Wabash National is 5.71 times more volatile than DLTR 265 01 DEC 31. It trades about -0.2 of its total potential returns per unit of risk. DLTR 265 01 DEC 31 is currently generating about 0.05 per unit of volatility. If you would invest  8,476  in DLTR 265 01 DEC 31 on December 29, 2024 and sell it today you would earn a total of  138.00  from holding DLTR 265 01 DEC 31 or generate 1.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Wabash National  vs.  DLTR 265 01 DEC 31

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.

DLTR 265 01

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DLTR 265 01 DEC 31 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 256746AJ7 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Wabash National and 256746AJ7

The main advantage of trading using opposite Wabash National and 256746AJ7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabash National position performs unexpectedly, 256746AJ7 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 256746AJ7 will offset losses from the drop in 256746AJ7's long position.

The idea behind Wabash National and DLTR 265 01 DEC 31 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.