Correlation Between Rockwell Automation and Wartsila Oyj
Can any of the company-specific risk be diversified away by investing in both Rockwell Automation and Wartsila Oyj 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 Rockwell Automation and Wartsila Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rockwell Automation and Wartsila Oyj Abp, you can compare the effects of market volatilities on Rockwell Automation and Wartsila Oyj 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 Rockwell Automation with a short position of Wartsila Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockwell Automation and Wartsila Oyj.
Diversification Opportunities for Rockwell Automation and Wartsila Oyj
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rockwell and Wartsila is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Rockwell Automation and Wartsila Oyj Abp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wartsila Oyj Abp and Rockwell Automation 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 Rockwell Automation are associated (or correlated) with Wartsila Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wartsila Oyj Abp has no effect on the direction of Rockwell Automation i.e., Rockwell Automation and Wartsila Oyj go up and down completely randomly.
Pair Corralation between Rockwell Automation and Wartsila Oyj
Considering the 90-day investment horizon Rockwell Automation is expected to generate 0.76 times more return on investment than Wartsila Oyj. However, Rockwell Automation is 1.32 times less risky than Wartsila Oyj. It trades about 0.21 of its potential returns per unit of risk. Wartsila Oyj Abp is currently generating about -0.1 per unit of risk. If you would invest 26,344 in Rockwell Automation on September 4, 2024 and sell it today you would earn a total of 3,368 from holding Rockwell Automation or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rockwell Automation vs. Wartsila Oyj Abp
Performance |
| Timeline |
| Rockwell Automation |
| Wartsila Oyj Abp |
Rockwell Automation and Wartsila Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rockwell Automation and Wartsila Oyj
The main advantage of trading using opposite Rockwell Automation and Wartsila Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockwell Automation position performs unexpectedly, Wartsila Oyj 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 Wartsila Oyj will offset losses from the drop in Wartsila Oyj's long position.| Rockwell Automation vs. Dover | Rockwell Automation vs. Illinois Tool Works | Rockwell Automation vs. Ingersoll Rand | Rockwell Automation vs. Eaton PLC |
| Wartsila Oyj vs. Dear Cashmere Holding | Wartsila Oyj vs. Goff Corp | Wartsila Oyj vs. Wialan Technologies | Wartsila Oyj vs. Cgrowth Capital |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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