Correlation Between Westinghouse Air and Brickell Biotech
Can any of the company-specific risk be diversified away by investing in both Westinghouse Air and Brickell Biotech 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 Brickell Biotech 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 Brickell Biotech, you can compare the effects of market volatilities on Westinghouse Air and Brickell Biotech 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 Brickell Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and Brickell Biotech.
Diversification Opportunities for Westinghouse Air and Brickell Biotech
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Westinghouse and Brickell is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and Brickell Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brickell Biotech 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 Brickell Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brickell Biotech has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and Brickell Biotech go up and down completely randomly.
Pair Corralation between Westinghouse Air and Brickell Biotech
If you would invest 20,097 in Westinghouse Air Brake on September 12, 2024 and sell it today you would earn a total of 190.00 from holding Westinghouse Air Brake or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Westinghouse Air Brake vs. Brickell Biotech
Performance |
| Timeline |
| Westinghouse Air Brake |
| Brickell Biotech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Westinghouse Air and Brickell Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westinghouse Air and Brickell Biotech
The main advantage of trading using opposite Westinghouse Air and Brickell Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, Brickell Biotech 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 Brickell Biotech will offset losses from the drop in Brickell Biotech's long position.| Westinghouse Air vs. LB Foster | Westinghouse Air vs. Freightcar America | Westinghouse Air vs. CSX Corporation | Westinghouse Air vs. Trinity Industries |
| Brickell Biotech vs. Porvair plc | Brickell Biotech vs. Pinterest | Brickell Biotech vs. Radcom | Brickell Biotech vs. Westinghouse Air Brake |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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