Correlation Between Modine Manufacturing and PHINIA

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

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

Diversification Opportunities for Modine Manufacturing and PHINIA

0.72

Correlation Coefficient

Modine Manufacturing  PHINIA

Poor diversification

The 3 months correlation between Modine and PHINIA is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and PHINIA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHINIA 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 PHINIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHINIA Inc has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and PHINIA go up and down completely randomly.

Pair Corralation between Modine Manufacturing and PHINIA

Considering the 90-day investment horizon Modine Manufacturing is expected to generate 2.04 times more return on investment than PHINIA. However, Modine Manufacturing is 2.04 times more volatile than PHINIA Inc. It trades about 0.14 of its potential returns per unit of risk. PHINIA Inc is currently generating about 0.21 per unit of risk. If you would invest  10,411  in Modine Manufacturing on May 18, 2025 and sell it today you would earn a total of  3,461  from holding Modine Manufacturing or generate 33.24% return on investment over 90 days.

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

Modine Manufacturing  vs.  PHINIA Inc

Modine Manufacturing

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Modine Manufacturing are ranked lower than 10 (%) 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.

PHINIA Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PHINIA Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal forward indicators, PHINIA displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Modine Manufacturing and PHINIA

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

The idea behind Modine Manufacturing and PHINIA 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.