Correlation Between SOCKET MOBILE and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both SOCKET MOBILE 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 SOCKET MOBILE and Westinghouse Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOCKET MOBILE NEW and Westinghouse Air Brake, you can compare the effects of market volatilities on SOCKET MOBILE 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 SOCKET MOBILE with a short position of Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOCKET MOBILE and Westinghouse Air.
Diversification Opportunities for SOCKET MOBILE and Westinghouse Air
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SOCKET and Westinghouse is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SOCKET MOBILE NEW 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 SOCKET MOBILE 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 SOCKET MOBILE NEW 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 SOCKET MOBILE i.e., SOCKET MOBILE and Westinghouse Air go up and down completely randomly.
Pair Corralation between SOCKET MOBILE and Westinghouse Air
Assuming the 90 days trading horizon SOCKET MOBILE NEW is expected to generate 4.66 times more return on investment than Westinghouse Air. However, SOCKET MOBILE is 4.66 times more volatile than Westinghouse Air Brake. It trades about 0.23 of its potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.45 per unit of risk. If you would invest 125.00 in SOCKET MOBILE NEW on October 30, 2024 and sell it today you would earn a total of 22.00 from holding SOCKET MOBILE NEW or generate 17.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOCKET MOBILE NEW vs. Westinghouse Air Brake
Performance |
| Timeline |
| SOCKET MOBILE NEW |
| Westinghouse Air Brake |
SOCKET MOBILE and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOCKET MOBILE and Westinghouse Air
The main advantage of trading using opposite SOCKET MOBILE and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOCKET MOBILE 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.| SOCKET MOBILE vs. INFORMATION SVC GRP | SOCKET MOBILE vs. DATADOT TECHNOLOGY | SOCKET MOBILE vs. China Datang | SOCKET MOBILE vs. Linedata Services SA |
| Westinghouse Air vs. Penn National Gaming | Westinghouse Air vs. Chengdu PUTIAN Telecommunications | Westinghouse Air vs. MAVEN WIRELESS SWEDEN | Westinghouse Air vs. Singapore Telecommunications Limited |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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