Correlation Between Verizon Communications and Manitowoc

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Verizon Communications 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 Verizon Communications and Manitowoc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verizon Communications and Manitowoc, you can compare the effects of market volatilities on Verizon Communications 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 Verizon Communications with a short position of Manitowoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verizon Communications and Manitowoc.

Diversification Opportunities for Verizon Communications and Manitowoc

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Verizon and Manitowoc is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and Manitowoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manitowoc and Verizon Communications 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 Verizon Communications 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 Verizon Communications i.e., Verizon Communications and Manitowoc go up and down completely randomly.

Pair Corralation between Verizon Communications and Manitowoc

Allowing for the 90-day total investment horizon Verizon Communications is expected to generate 0.47 times more return on investment than Manitowoc. However, Verizon Communications is 2.13 times less risky than Manitowoc. It trades about -0.07 of its potential returns per unit of risk. Manitowoc is currently generating about -0.13 per unit of risk. If you would invest  4,897  in Verizon Communications on July 5, 2022 and sell it today you would lose (973.00)  from holding Verizon Communications or give up 19.87% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Verizon Communications  vs.  Manitowoc

 Performance (%) 
       Timeline  
Verizon Communications 
Verizon Performance
0 of 100
Over the last 90 days Verizon Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in November 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Verizon 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 conflicting performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in November 2022. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Manitowoc Price Channel

Verizon Communications and Manitowoc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Verizon Communications and Manitowoc

The main advantage of trading using opposite Verizon Communications and Manitowoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verizon Communications 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.
Verizon Communications vs. Amazon Inc
The idea behind Verizon Communications 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. Amazon Inc
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

Other Complementary Tools

Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Money Managers
Screen money managers from public funds and ETFs managed around the world
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go