Correlation Between KRAFT and Westinghouse Air
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By analyzing existing cross correlation between KRAFT FOODS GROUP and Westinghouse Air Brake, you can compare the effects of market volatilities on KRAFT 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 KRAFT with a short position of Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of KRAFT and Westinghouse Air.
Diversification Opportunities for KRAFT and Westinghouse Air
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KRAFT and Westinghouse is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding KRAFT FOODS GROUP 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 KRAFT 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 KRAFT FOODS GROUP 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 KRAFT i.e., KRAFT and Westinghouse Air go up and down completely randomly.
Pair Corralation between KRAFT and Westinghouse Air
Assuming the 90 days trading horizon KRAFT is expected to generate 7.1 times less return on investment than Westinghouse Air. But when comparing it to its historical volatility, KRAFT FOODS GROUP is 1.8 times less risky than Westinghouse Air. It trades about 0.07 of its potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 18,665 in Westinghouse Air Brake on September 2, 2024 and sell it today you would earn a total of 1,397 from holding Westinghouse Air Brake or generate 7.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
KRAFT FOODS GROUP vs. Westinghouse Air Brake
Performance |
| Timeline |
| KRAFT FOODS GROUP |
| Westinghouse Air Brake |
KRAFT and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KRAFT and Westinghouse Air
The main advantage of trading using opposite KRAFT and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KRAFT 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.| KRAFT vs. ChampionX | KRAFT vs. Simpson Manufacturing | KRAFT vs. Kite Realty Group | KRAFT vs. Upper Street Marketing |
| Westinghouse Air vs. Greenbrier Companies | Westinghouse Air vs. LB Foster | Westinghouse Air vs. CSX Corporation | Westinghouse Air vs. Norfolk Southern |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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