Correlation Between Agco Corp and Manitowoc

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Can any of the company-specific risk be diversified away by investing in both Agco Corp and Manitowoc 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 Agco Corp and Manitowoc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agco Corp and Manitowoc, you can compare the effects of market volatilities on Agco Corp and Manitowoc 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 Agco Corp with a short position of Manitowoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agco Corp and Manitowoc.

Diversification Opportunities for Agco Corp and Manitowoc

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between Agco Corp and Manitowoc is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Agco Corp and Manitowoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manitowoc and Agco Corp 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 Agco Corp are associated (or correlated) with Manitowoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manitowoc has no effect on the direction of Agco Corp i.e., Agco Corp and Manitowoc go up and down completely randomly.

Pair Corralation between Agco Corp and Manitowoc

Given the investment horizon of 90 days Agco Corp is expected to generate 0.72 times more return on investment than Manitowoc. However, Agco Corp is 1.38 times less risky than Manitowoc. It trades about 0.03 of its potential returns per unit of risk. Manitowoc is currently generating about 0.01 per unit of risk. If you would invest  7,404  in Agco Corp on June 26, 2022 and sell it today you would earn a total of  2,308  from holding Agco Corp or generate 31.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Agco Corp  vs.  Manitowoc

 Performance (%) 
       Timeline  
Agco Corp 
Agco Corp Performance
0 of 100
Over the last 90 days Agco Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Agco Corp is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Agco Corp Price Channel

Manitowoc 
Manitowoc Performance
0 of 100
Over the last 90 days Manitowoc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in October 2022. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Manitowoc Price Channel

Agco Corp and Manitowoc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Agco Corp and Manitowoc

The main advantage of trading using opposite Agco Corp and Manitowoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agco Corp position performs unexpectedly, Manitowoc 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 Manitowoc will offset losses from the drop in Manitowoc's long position.
Agco Corp vs. BUSHVELD MINERALS LTD
The idea behind Agco Corp and Manitowoc 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.
Manitowoc vs. BUSHVELD MINERALS LTD
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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