Correlation Between Wabash National and INTNED

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

By analyzing existing cross correlation between Wabash National and INTNED 575, you can compare the effects of market volatilities on Wabash National and INTNED 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 INTNED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wabash National and INTNED.

Diversification Opportunities for Wabash National and INTNED

0.28

Correlation Coefficient

Wabash National  INTNED

Modest diversification

The 3 months correlation between Wabash and INTNED is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Wabash National and INTNED 575 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTNED 575 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 INTNED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTNED 575 has no effect on the direction of Wabash National i.e., Wabash National and INTNED go up and down completely randomly.

Pair Corralation between Wabash National and INTNED

Considering the 90-day investment horizon Wabash National is expected to under-perform the INTNED. In addition to that, Wabash National is 2.04 times more volatile than INTNED 575. It trades about -0.29 of its total potential returns per unit of risk. INTNED 575 is currently generating about -0.43 per unit of volatility. If you would invest  9,923  in INTNED 575 on October 6, 2024 and sell it today you would lose (323.00) from holding INTNED 575 or give up 3.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	40.0%
Values	Daily Returns

Wabash National  vs.  INTNED 575

Wabash National

Risk-Adjusted Performance

0 of 100

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 rather sound basic indicators, Wabash National is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

INTNED 575

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Wabash National and INTNED

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

The idea behind Wabash National and INTNED 575 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.