Correlation Between Jeld Wen and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both Jeld Wen 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 Jeld Wen and Westinghouse Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeld Wen Holding and Westinghouse Air Brake, you can compare the effects of market volatilities on Jeld Wen 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 Jeld Wen with a short position of Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeld Wen and Westinghouse Air.
Diversification Opportunities for Jeld Wen and Westinghouse Air
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jeld and Westinghouse is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Jeld Wen Holding 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 Jeld Wen 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 Jeld Wen Holding 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 Jeld Wen i.e., Jeld Wen and Westinghouse Air go up and down completely randomly.
Pair Corralation between Jeld Wen and Westinghouse Air
Given the investment horizon of 90 days Jeld Wen Holding is expected to under-perform the Westinghouse Air. In addition to that, Jeld Wen is 5.93 times more volatile than Westinghouse Air Brake. It trades about -0.14 of its total potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.21 per unit of volatility. If you would invest 18,715 in Westinghouse Air Brake on August 24, 2024 and sell it today you would earn a total of 1,088 from holding Westinghouse Air Brake or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeld Wen Holding vs. Westinghouse Air Brake
Performance |
| Timeline |
| Jeld Wen Holding |
| Westinghouse Air Brake |
Jeld Wen and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeld Wen and Westinghouse Air
The main advantage of trading using opposite Jeld Wen and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeld Wen 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.| Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Quanex Building Products | Jeld Wen vs. Perma Pipe International Holdings | Jeld Wen vs. Interface |
| Westinghouse Air vs. Greenbrier Companies | Westinghouse Air vs. LB Foster | Westinghouse Air vs. Freightcar America | Westinghouse Air 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.
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