Correlation Between Wabash National and NESNVX

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

By analyzing existing cross correlation between Wabash National and NESNVX 2625 14 SEP 51, you can compare the effects of market volatilities on Wabash National 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 Wabash National with a short position of NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wabash National and NESNVX.

Diversification Opportunities for Wabash National and NESNVX

0.53

Correlation Coefficient

Wabash National  NESNVX

Very weak diversification

The 3 months correlation between Wabash and NESNVX is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Wabash National and NESNVX 2625 14 SEP 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 2625 14 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 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 2625 14 has no effect on the direction of Wabash National i.e., Wabash National and NESNVX go up and down completely randomly.

Pair Corralation between Wabash National and NESNVX

Considering the 90-day investment horizon Wabash National is expected to under-perform the NESNVX. In addition to that, Wabash National is 1.16 times more volatile than NESNVX 2625 14 SEP 51. It trades about -0.41 of its total potential returns per unit of risk. NESNVX 2625 14 SEP 51 is currently generating about 0.01 per unit of volatility. If you would invest  6,200  in NESNVX 2625 14 SEP 51 on October 10, 2024 and sell it today you would earn a total of  4.00  from holding NESNVX 2625 14 SEP 51 or generate 0.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	35.0%
Values	Daily Returns

Wabash National  vs.  NESNVX 2625 14 SEP 51

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 latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

NESNVX 2625 14

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 2625 14 SEP 51 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for NESNVX 2625 14 SEP 51 investors.

Pair Trading with Wabash National and NESNVX

The main advantage of trading using opposite Wabash National and NESNVX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabash National 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 Wabash National and NESNVX 2625 14 SEP 51 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.