Correlation Between Westinghouse Air and Unifique Telecomunicaes
Can any of the company-specific risk be diversified away by investing in both Westinghouse Air and Unifique Telecomunicaes 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 Westinghouse Air and Unifique Telecomunicaes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westinghouse Air Brake and Unifique Telecomunicaes SA, you can compare the effects of market volatilities on Westinghouse Air and Unifique Telecomunicaes 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 Westinghouse Air with a short position of Unifique Telecomunicaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and Unifique Telecomunicaes.
Diversification Opportunities for Westinghouse Air and Unifique Telecomunicaes
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Westinghouse and Unifique is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and Unifique Telecomunicaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unifique Telecomunicaes and Westinghouse Air 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 Westinghouse Air Brake are associated (or correlated) with Unifique Telecomunicaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unifique Telecomunicaes has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and Unifique Telecomunicaes go up and down completely randomly.
Pair Corralation between Westinghouse Air and Unifique Telecomunicaes
Assuming the 90 days trading horizon Westinghouse Air Brake is expected to generate 0.64 times more return on investment than Unifique Telecomunicaes. However, Westinghouse Air Brake is 1.55 times less risky than Unifique Telecomunicaes. It trades about 0.15 of its potential returns per unit of risk. Unifique Telecomunicaes SA is currently generating about -0.1 per unit of risk. If you would invest 54,826 in Westinghouse Air Brake on October 29, 2024 and sell it today you would earn a total of 6,538 from holding Westinghouse Air Brake or generate 11.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westinghouse Air Brake vs. Unifique Telecomunicaes SA
Performance |
| Timeline |
| Westinghouse Air Brake |
| Unifique Telecomunicaes |
Westinghouse Air and Unifique Telecomunicaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westinghouse Air and Unifique Telecomunicaes
The main advantage of trading using opposite Westinghouse Air and Unifique Telecomunicaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, Unifique Telecomunicaes 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 Unifique Telecomunicaes will offset losses from the drop in Unifique Telecomunicaes' long position.| Westinghouse Air vs. Pentair plc | Westinghouse Air vs. Fair Isaac | Westinghouse Air vs. Darden Restaurants, | Westinghouse Air vs. MAHLE Metal Leve |
| Unifique Telecomunicaes vs. Elevance Health, | Unifique Telecomunicaes vs. The Home Depot | Unifique Telecomunicaes vs. The Hartford Financial | Unifique Telecomunicaes vs. GP Investments |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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