Correlation Between Columbus Mckinnon and Manitowoc

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

Diversification Opportunities for Columbus Mckinnon and Manitowoc

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Columbus and Manitowoc is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Columbus Mckinnon and Manitowoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manitowoc and Columbus Mckinnon 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 Columbus Mckinnon 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 Columbus Mckinnon i.e., Columbus Mckinnon and Manitowoc go up and down completely randomly.

Pair Corralation between Columbus Mckinnon and Manitowoc

Given the investment horizon of 90 days Columbus Mckinnon is expected to under-perform the Manitowoc. But the stock apears to be less risky and, when comparing its historical volatility, Columbus Mckinnon is 1.47 times less risky than Manitowoc. The stock trades about -0.01 of its potential returns per unit of risk. The Manitowoc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  919.00  in Manitowoc on June 26, 2022 and sell it today you would lose (86.00)  from holding Manitowoc or give up 9.36% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Columbus Mckinnon  vs.  Manitowoc

 Performance (%) 
       Timeline  
Columbus Mckinnon 
Columbus Performance
0 of 100
Over the last 90 days Columbus Mckinnon has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Columbus 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

Columbus Mckinnon and Manitowoc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Columbus Mckinnon and Manitowoc

The main advantage of trading using opposite Columbus Mckinnon and Manitowoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbus Mckinnon 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.
Columbus Mckinnon vs. BUSHVELD MINERALS LTD
The idea behind Columbus Mckinnon 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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