Correlation Between MCBC Holdings and Winnebago Industries

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

Diversification Opportunities for MCBC Holdings and Winnebago Industries

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between MCBC Holdings and Winnebago is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding MCBC Holdings and Winnebago Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winnebago Industries and MCBC Holdings 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 MCBC Holdings are associated (or correlated) with Winnebago Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winnebago Industries has no effect on the direction of MCBC Holdings i.e., MCBC Holdings and Winnebago Industries go up and down completely randomly.

Pair Corralation between MCBC Holdings and Winnebago Industries

Given the investment horizon of 90 days MCBC Holdings is expected to generate 0.87 times more return on investment than Winnebago Industries. However, MCBC Holdings is 1.16 times less risky than Winnebago Industries. It trades about 0.01 of its potential returns per unit of risk. Winnebago Industries is currently generating about 0.0 per unit of risk. If you would invest  2,803  in MCBC Holdings on September 4, 2022 and sell it today you would lose (168.00)  from holding MCBC Holdings or give up 5.99% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

MCBC Holdings  vs.  Winnebago Industries

 Performance (%) 
       Timeline  
MCBC Holdings 
MCBC Holdings Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in MCBC Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, MCBC Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

MCBC Holdings Price Channel

Winnebago Industries 
Winnebago Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Winnebago Industries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical and fundamental indicators, Winnebago Industries may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Winnebago Price Channel

MCBC Holdings and Winnebago Industries Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MCBC Holdings and Winnebago Industries

The main advantage of trading using opposite MCBC Holdings and Winnebago Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCBC Holdings position performs unexpectedly, Winnebago Industries 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 Winnebago Industries will offset losses from the drop in Winnebago Industries' long position.
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The idea behind MCBC Holdings and Winnebago Industries 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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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 Commodity Channel Index module to use Commodity Channel Index to analyze current equity momentum.

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