Correlation Between Modine Manufacturing and BCE

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

By analyzing existing cross correlation between Modine Manufacturing and BCE Inc, you can compare the effects of market volatilities on Modine Manufacturing and BCE 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 Modine Manufacturing with a short position of BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and BCE.

Diversification Opportunities for Modine Manufacturing and BCE

0.27

Correlation Coefficient

Modine Manufacturing  BCE

Modest diversification

The 3 months correlation between Modine and BCE is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc and Modine Manufacturing 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 Modine Manufacturing are associated (or correlated) with BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and BCE go up and down completely randomly.

Pair Corralation between Modine Manufacturing and BCE

Considering the 90-day investment horizon Modine Manufacturing is expected to under-perform the BCE. In addition to that, Modine Manufacturing is 2.26 times more volatile than BCE Inc. It trades about -0.09 of its total potential returns per unit of risk. BCE Inc is currently generating about 0.23 per unit of volatility. If you would invest  2,263  in BCE Inc on April 13, 2025 and sell it today you would earn a total of  118.00  from holding BCE Inc or generate 5.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Modine Manufacturing  vs.  BCE Inc

Modine Manufacturing

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Modine Manufacturing are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Modine Manufacturing exhibited solid returns over the last few months and may actually be approaching a breakup point.

BCE Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BCE Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, BCE may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Modine Manufacturing and BCE

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

The idea behind Modine Manufacturing and BCE Inc 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.