Correlation Between DAX Index and Westinghouse Air
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By analyzing existing cross correlation between DAX Index and Westinghouse Air Brake, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Westinghouse Air.
Diversification Opportunities for DAX Index and Westinghouse Air
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Westinghouse is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index 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 DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Westinghouse Air go up and down completely randomly.
Pair Corralation between DAX Index and Westinghouse Air
Assuming the 90 days trading horizon DAX Index is expected to generate 9.02 times less return on investment than Westinghouse Air. But when comparing it to its historical volatility, DAX Index is 1.75 times less risky than Westinghouse Air. It trades about 0.05 of its potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 14,734 in Westinghouse Air Brake on August 28, 2024 and sell it today you would earn a total of 4,301 from holding Westinghouse Air Brake or generate 29.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Westinghouse Air Brake
Performance |
| Timeline |
DAX Index and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Westinghouse Air Brake
Pair trading matchups for Westinghouse Air
Pair Trading with DAX Index and Westinghouse Air
The main advantage of trading using opposite DAX Index and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. ELMOS SEMICONDUCTOR | DAX Index vs. ALTAIR RES INC | DAX Index vs. Fair Isaac Corp | DAX Index vs. Taiwan Semiconductor Manufacturing |
| Westinghouse Air vs. ScanSource | Westinghouse Air vs. Marie Brizard Wine | Westinghouse Air vs. China Resources Beer | Westinghouse Air vs. Chunghwa Telecom Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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