Correlation Between Modine Manufacturing and SU Group

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

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

Diversification Opportunities for Modine Manufacturing and SU Group

0.42

Correlation Coefficient

Modine Manufacturing  SU Group

Very weak diversification

The 3 months correlation between Modine and SUGP is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and SU Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SU Group Holdings 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 SU Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SU Group Holdings has no effect on the direction of Modine Manufacturing i.e., Modine Manufacturing and SU Group go up and down completely randomly.

Pair Corralation between Modine Manufacturing and SU Group

Considering the 90-day investment horizon Modine Manufacturing is expected to generate 19.15 times less return on investment than SU Group. But when comparing it to its historical volatility, Modine Manufacturing is 30.6 times less risky than SU Group. It trades about 0.21 of its potential returns per unit of risk. SU Group Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  87.00  in SU Group Holdings on May 27, 2025 and sell it today you would earn a total of  348.00  from holding SU Group Holdings or generate 400.0% return on investment over 90 days.

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

Modine Manufacturing  vs.  SU Group Holdings

Modine Manufacturing

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Modine Manufacturing are ranked lower than 16 (%) 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.

SU Group Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SU Group Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, SU Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Modine Manufacturing and SU Group

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

The idea behind Modine Manufacturing and SU Group Holdings 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.