Correlation Between Navistar International and PACCAR
Can any of the company-specific risk be diversified away by investing in both Navistar International and PACCAR 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 Navistar International and PACCAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Navistar International and PACCAR Inc, you can compare the effects of market volatilities on Navistar International and PACCAR 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 Navistar International with a short position of PACCAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navistar International and PACCAR.
Diversification Opportunities for Navistar International and PACCAR
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Navistar and PACCAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Navistar International and PACCAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACCAR Inc and Navistar International 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 Navistar International are associated (or correlated) with PACCAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACCAR Inc has no effect on the direction of Navistar International i.e., Navistar International and PACCAR go up and down completely randomly.
Pair Corralation between Navistar International and PACCAR
If you would invest (100.00) in Navistar International on January 17, 2024 and sell it today you would earn a total of 100.00 from holding Navistar International or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Navistar International vs. PACCAR Inc
Performance |
| Timeline |
| Navistar International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PACCAR Inc |
Navistar International and PACCAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Navistar International and PACCAR
The main advantage of trading using opposite Navistar International and PACCAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navistar International position performs unexpectedly, PACCAR 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 PACCAR will offset losses from the drop in PACCAR's long position.| Navistar International vs. Valneva SE ADR | Navistar International vs. Old Dominion Freight | Navistar International vs. Teleflex Incorporated | Navistar International vs. enVVeno Medical Corp |
Check out your portfolio center.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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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