Correlation Between Mayfair Gold and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both Mayfair Gold 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 Mayfair Gold and Westinghouse Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mayfair Gold Corp and Westinghouse Air Brake, you can compare the effects of market volatilities on Mayfair Gold 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 Mayfair Gold with a short position of Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayfair Gold and Westinghouse Air.
Diversification Opportunities for Mayfair Gold and Westinghouse Air
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mayfair and Westinghouse is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mayfair Gold 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 Mayfair Gold 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 Mayfair Gold 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 Mayfair Gold i.e., Mayfair Gold and Westinghouse Air go up and down completely randomly.
Pair Corralation between Mayfair Gold and Westinghouse Air
Assuming the 90 days horizon Mayfair Gold Corp is expected to under-perform the Westinghouse Air. In addition to that, Mayfair Gold is 2.81 times more volatile than Westinghouse Air Brake. It trades about -0.13 of its total potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.17 per unit of volatility. If you would invest 19,066 in Westinghouse Air Brake on August 28, 2024 and sell it today you would earn a total of 862.00 from holding Westinghouse Air Brake or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mayfair Gold Corp vs. Westinghouse Air Brake
Performance |
| Timeline |
| Mayfair Gold Corp |
| Westinghouse Air Brake |
Mayfair Gold and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mayfair Gold and Westinghouse Air
The main advantage of trading using opposite Mayfair Gold and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayfair Gold 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.| Mayfair Gold vs. Aurion Resources | Mayfair Gold vs. Liberty Gold Corp | Mayfair Gold vs. Orezone Gold Corp | Mayfair Gold vs. Radisson Mining Resources |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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