Correlation Between Commercial Vehicle and WINDSTREAM HLDGS

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

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

Diversification Opportunities for Commercial Vehicle and WINDSTREAM HLDGS

0.85

Correlation Coefficient

Commercial Vehicle  WINDSTREAM HLDGS

Very poor diversification

The 3 months correlation between Commercial and WINDSTREAM is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and WINDSTREAM HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WINDSTREAM HLDGS and Commercial Vehicle 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 Commercial Vehicle Group are associated (or correlated) with WINDSTREAM HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WINDSTREAM HLDGS has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and WINDSTREAM HLDGS go up and down completely randomly.

Pair Corralation between Commercial Vehicle and WINDSTREAM HLDGS

If you would invest  234.00  in Commercial Vehicle Group on September 17, 2024 and sell it today you would earn a total of  10.00  from holding Commercial Vehicle Group or generate 4.27% return on investment over 90 days.

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

Commercial Vehicle Group  vs.  WINDSTREAM HLDGS

Commercial Vehicle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Commercial Vehicle Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

WINDSTREAM HLDGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WINDSTREAM HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Commercial Vehicle and WINDSTREAM HLDGS

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

The idea behind Commercial Vehicle Group and WINDSTREAM HLDGS 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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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.