Correlation Between Manitowoc and Lindsay

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

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

Diversification Opportunities for Manitowoc and Lindsay

0.55

Correlation Coefficient

Manitowoc  Lindsay

Very weak diversification

The 3 months correlation between Manitowoc and Lindsay is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Manitowoc and Lindsay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsay and Manitowoc 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 Manitowoc are associated (or correlated) with Lindsay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsay has no effect on the direction of Manitowoc i.e., Manitowoc and Lindsay go up and down completely randomly.

Pair Corralation between Manitowoc and Lindsay

Considering the 90-day investment horizon Manitowoc is expected to generate 1.59 times more return on investment than Lindsay. However, Manitowoc is 1.59 times more volatile than Lindsay. It trades about 0.05 of its potential returns per unit of risk. Lindsay is currently generating about 0.02 per unit of risk. If you would invest  967.00  in Manitowoc on August 20, 2024 and sell it today you would earn a total of  85.00  from holding Manitowoc or generate 8.79% return on investment over 90 days.

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

Manitowoc  vs.  Lindsay

Manitowoc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Manitowoc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Manitowoc may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Lindsay

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lindsay are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Lindsay is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Manitowoc and Lindsay

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

The idea behind Manitowoc and Lindsay 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..