Correlation Between CHINA EDUCATION and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION 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 CHINA EDUCATION and Westinghouse Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA EDUCATION GROUP and Westinghouse Air Brake, you can compare the effects of market volatilities on CHINA EDUCATION 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 CHINA EDUCATION with a short position of Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and Westinghouse Air.
Diversification Opportunities for CHINA EDUCATION and Westinghouse Air
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CHINA and Westinghouse is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP 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 CHINA EDUCATION 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 CHINA EDUCATION GROUP 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 CHINA EDUCATION i.e., CHINA EDUCATION and Westinghouse Air go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and Westinghouse Air
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to under-perform the Westinghouse Air. In addition to that, CHINA EDUCATION is 2.64 times more volatile than Westinghouse Air Brake. It trades about -0.16 of its total potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.19 per unit of volatility. If you would invest 17,262 in Westinghouse Air Brake on August 25, 2024 and sell it today you would earn a total of 1,233 from holding Westinghouse Air Brake or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. Westinghouse Air Brake
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| Westinghouse Air Brake |
CHINA EDUCATION and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and Westinghouse Air
The main advantage of trading using opposite CHINA EDUCATION and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION 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.| CHINA EDUCATION vs. Zoom Video Communications | CHINA EDUCATION vs. AUTO TRADER ADR | CHINA EDUCATION vs. Tradeweb Markets | CHINA EDUCATION vs. MOVIE GAMES SA |
| Westinghouse Air vs. Chunghwa Telecom Co | Westinghouse Air vs. Consolidated Communications Holdings | Westinghouse Air vs. Singapore Telecommunications Limited | Westinghouse Air vs. Rogers Communications |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |