Correlation Between Broadwind and WESCO International
Can any of the company-specific risk be diversified away by investing in both Broadwind and WESCO International 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 Broadwind and WESCO International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadwind and WESCO International, you can compare the effects of market volatilities on Broadwind and WESCO International 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 Broadwind with a short position of WESCO International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadwind and WESCO International.
Diversification Opportunities for Broadwind and WESCO International
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Broadwind and WESCO is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Broadwind and WESCO International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESCO International and Broadwind 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 Broadwind are associated (or correlated) with WESCO International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESCO International has no effect on the direction of Broadwind i.e., Broadwind and WESCO International go up and down completely randomly.
Pair Corralation between Broadwind and WESCO International
Assuming the 90 days trading horizon Broadwind is expected to under-perform the WESCO International. In addition to that, Broadwind is 1.68 times more volatile than WESCO International. It trades about -0.02 of its total potential returns per unit of risk. WESCO International is currently generating about 0.04 per unit of volatility. If you would invest 14,007 in WESCO International on October 29, 2024 and sell it today you would earn a total of 4,793 from holding WESCO International or generate 34.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broadwind vs. WESCO International
Performance |
| Timeline |
| Broadwind |
| WESCO International |
Broadwind and WESCO International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadwind and WESCO International
The main advantage of trading using opposite Broadwind and WESCO International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadwind position performs unexpectedly, WESCO International 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 WESCO International will offset losses from the drop in WESCO International's long position.| Broadwind vs. SCANDMEDICAL SOLDK 040 | Broadwind vs. Japan Medical Dynamic | Broadwind vs. Waste Management | Broadwind vs. Corporate Travel Management |
| WESCO International vs. Magnachip Semiconductor | WESCO International vs. Salesforce | WESCO International vs. YATRA ONLINE DL 0001 | WESCO International vs. Gruppo Mutuionline SpA |
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 the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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