Correlation Between Greenbrier Companies and Honeywell International
Can any of the company-specific risk be diversified away by investing in both Greenbrier Companies and Honeywell 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 Greenbrier Companies and Honeywell International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenbrier Companies and Honeywell International, you can compare the effects of market volatilities on Greenbrier Companies and Honeywell 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 Greenbrier Companies with a short position of Honeywell International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenbrier Companies and Honeywell International.
Diversification Opportunities for Greenbrier Companies and Honeywell International
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Greenbrier and Honeywell is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Greenbrier Companies and Honeywell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honeywell International and Greenbrier Companies 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 Greenbrier Companies are associated (or correlated) with Honeywell International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honeywell International has no effect on the direction of Greenbrier Companies i.e., Greenbrier Companies and Honeywell International go up and down completely randomly.
Pair Corralation between Greenbrier Companies and Honeywell International
Considering the 90-day investment horizon Greenbrier Companies is expected to generate 1.01 times less return on investment than Honeywell International. In addition to that, Greenbrier Companies is 1.35 times more volatile than Honeywell International. It trades about 0.27 of its total potential returns per unit of risk. Honeywell International is currently generating about 0.38 per unit of volatility. If you would invest 20,497 in Honeywell International on August 30, 2024 and sell it today you would earn a total of 2,467 from holding Honeywell International or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenbrier Companies vs. Honeywell International
Performance |
| Timeline |
| Greenbrier Companies |
| Honeywell International |
Greenbrier Companies and Honeywell International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenbrier Companies and Honeywell International
The main advantage of trading using opposite Greenbrier Companies and Honeywell International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenbrier Companies position performs unexpectedly, Honeywell 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 Honeywell International will offset losses from the drop in Honeywell International's long position.| Greenbrier Companies vs. LB Foster | Greenbrier Companies vs. Freightcar America | Greenbrier Companies vs. Westinghouse Air Brake | Greenbrier Companies vs. CSX Corporation |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |