Correlation Between Transcat and WESCO International
Can any of the company-specific risk be diversified away by investing in both Transcat and WESCO International 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 Transcat and WESCO International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transcat and WESCO International, you can compare the effects of market volatilities on Transcat and WESCO International 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 Transcat with a short position of WESCO International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transcat and WESCO International.
Diversification Opportunities for Transcat and WESCO International
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Transcat and WESCO is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Transcat and WESCO International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESCO International and Transcat 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 Transcat are associated (or correlated) with WESCO International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESCO International has no effect on the direction of Transcat i.e., Transcat and WESCO International go up and down completely randomly.
Pair Corralation between Transcat and WESCO International
Given the investment horizon of 90 days Transcat is expected to under-perform the WESCO International. In addition to that, Transcat is 33.71 times more volatile than WESCO International. It trades about -0.07 of its total potential returns per unit of risk. WESCO International is currently generating about 0.24 per unit of volatility. If you would invest 2,596 in WESCO International on August 27, 2024 and sell it today you would earn a total of 18.00 from holding WESCO International or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transcat vs. WESCO International
Performance |
| Timeline |
| Transcat |
| WESCO International |
Transcat and WESCO International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transcat and WESCO International
The main advantage of trading using opposite Transcat and WESCO International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transcat position performs unexpectedly, WESCO International 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 WESCO International will offset losses from the drop in WESCO International's long position.| Transcat vs. BlueLinx Holdings | Transcat vs. SiteOne Landscape Supply | Transcat vs. DXP Enterprises | Transcat vs. Core Main |
| WESCO International vs. SiriusPoint | WESCO International vs. Argo Group International | WESCO International vs. Global Ship Lease | WESCO International vs. Compass Diversified |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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