Correlation Between CCSB Financial and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both CCSB Financial 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 CCSB Financial and Westinghouse Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCSB Financial Corp and Westinghouse Air Brake, you can compare the effects of market volatilities on CCSB Financial 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 CCSB Financial with a short position of Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCSB Financial and Westinghouse Air.
Diversification Opportunities for CCSB Financial and Westinghouse Air
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CCSB and Westinghouse is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding CCSB Financial Corp 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 CCSB Financial 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 CCSB Financial Corp 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 CCSB Financial i.e., CCSB Financial and Westinghouse Air go up and down completely randomly.
Pair Corralation between CCSB Financial and Westinghouse Air
Given the investment horizon of 90 days CCSB Financial is expected to generate 7.71 times less return on investment than Westinghouse Air. In addition to that, CCSB Financial is 2.21 times more volatile than Westinghouse Air Brake. It trades about 0.01 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 10,956 in Westinghouse Air Brake on September 1, 2024 and sell it today you would earn a total of 9,106 from holding Westinghouse Air Brake or generate 83.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCSB Financial Corp vs. Westinghouse Air Brake
Performance |
| Timeline |
| CCSB Financial Corp |
| Westinghouse Air Brake |
CCSB Financial and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCSB Financial and Westinghouse Air
The main advantage of trading using opposite CCSB Financial and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCSB Financial 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.| CCSB Financial vs. RCI Hospitality Holdings | CCSB Financial vs. SL Green Realty | CCSB Financial vs. JBG SMITH Properties | CCSB Financial vs. Addus HomeCare |
| Westinghouse Air vs. Greenbrier Companies | Westinghouse Air vs. LB Foster | Westinghouse Air vs. CSX Corporation | Westinghouse Air vs. Norfolk Southern |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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