Correlation Between Greenbrier Companies and West Japan
Can any of the company-specific risk be diversified away by investing in both Greenbrier Companies and West Japan 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 West Japan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenbrier Companies and West Japan Railway, you can compare the effects of market volatilities on Greenbrier Companies and West Japan 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 West Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenbrier Companies and West Japan.
Diversification Opportunities for Greenbrier Companies and West Japan
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Greenbrier and West is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Greenbrier Companies and West Japan Railway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West Japan Railway 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 West Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West Japan Railway has no effect on the direction of Greenbrier Companies i.e., Greenbrier Companies and West Japan go up and down completely randomly.
Pair Corralation between Greenbrier Companies and West Japan
Considering the 90-day investment horizon Greenbrier Companies is expected to generate 1.9 times more return on investment than West Japan. However, Greenbrier Companies is 1.9 times more volatile than West Japan Railway. It trades about 0.06 of its potential returns per unit of risk. West Japan Railway is currently generating about 0.01 per unit of risk. If you would invest 3,048 in Greenbrier Companies on November 19, 2024 and sell it today you would earn a total of 2,845 from holding Greenbrier Companies or generate 93.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenbrier Companies vs. West Japan Railway
Performance |
| Timeline |
| Greenbrier Companies |
| West Japan Railway |
Greenbrier Companies and West Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenbrier Companies and West Japan
The main advantage of trading using opposite Greenbrier Companies and West Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenbrier Companies position performs unexpectedly, West Japan 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 West Japan will offset losses from the drop in West Japan's long position.| Greenbrier Companies vs. LB Foster | Greenbrier Companies vs. Freightcar America | Greenbrier Companies vs. Westinghouse Air Brake | Greenbrier Companies vs. CSX Corporation |
| West Japan vs. Central Japan Railway | West Japan vs. LB Foster | West Japan vs. East Japan Railway | West Japan vs. Greenbrier Companies |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |