Correlation Between Arrow Electronics and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both Arrow Electronics and Westinghouse Air 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 Arrow Electronics and Westinghouse Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Electronics and Westinghouse Air Brake, you can compare the effects of market volatilities on Arrow Electronics and Westinghouse Air 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 Arrow Electronics with a short position of Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Electronics and Westinghouse Air.
Diversification Opportunities for Arrow Electronics and Westinghouse Air
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arrow and Westinghouse is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Electronics and Westinghouse Air Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westinghouse Air Brake and Arrow Electronics 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 Arrow Electronics are associated (or correlated) with Westinghouse Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westinghouse Air Brake has no effect on the direction of Arrow Electronics i.e., Arrow Electronics and Westinghouse Air go up and down completely randomly.
Pair Corralation between Arrow Electronics and Westinghouse Air
Assuming the 90 days horizon Arrow Electronics is expected to generate 4.01 times less return on investment than Westinghouse Air. In addition to that, Arrow Electronics is 1.08 times more volatile than Westinghouse Air Brake. It trades about 0.02 of its total potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.1 per unit of volatility. If you would invest 9,424 in Westinghouse Air Brake on August 29, 2024 and sell it today you would earn a total of 9,611 from holding Westinghouse Air Brake or generate 101.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Electronics vs. Westinghouse Air Brake
Performance |
| Timeline |
| Arrow Electronics |
| Westinghouse Air Brake |
Arrow Electronics and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Electronics and Westinghouse Air
The main advantage of trading using opposite Arrow Electronics and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Electronics position performs unexpectedly, Westinghouse Air 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 Westinghouse Air will offset losses from the drop in Westinghouse Air's long position.| Arrow Electronics vs. DICKER DATA LTD | Arrow Electronics vs. PC Connection | Arrow Electronics vs. KAGA EL LTD | Arrow Electronics vs. Wayside Technology Group |
| Westinghouse Air vs. Union Pacific | Westinghouse Air vs. Superior Plus Corp | Westinghouse Air vs. NMI Holdings | Westinghouse Air vs. SIVERS SEMICONDUCTORS AB |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |