Correlation Between Westinghouse Air and EvoAir Holdings
Can any of the company-specific risk be diversified away by investing in both Westinghouse Air and EvoAir Holdings 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 EvoAir Holdings 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 EvoAir Holdings, you can compare the effects of market volatilities on Westinghouse Air and EvoAir Holdings 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 EvoAir Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and EvoAir Holdings.
Diversification Opportunities for Westinghouse Air and EvoAir Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Westinghouse and EvoAir is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and EvoAir Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EvoAir Holdings 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 EvoAir Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EvoAir Holdings has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and EvoAir Holdings go up and down completely randomly.
Pair Corralation between Westinghouse Air and EvoAir Holdings
Considering the 90-day investment horizon Westinghouse Air Brake is expected to generate 5.57 times more return on investment than EvoAir Holdings. However, Westinghouse Air is 5.57 times more volatile than EvoAir Holdings. It trades about 0.16 of its potential returns per unit of risk. EvoAir Holdings is currently generating about 0.05 per unit of risk. If you would invest 9,874 in Westinghouse Air Brake on September 2, 2024 and sell it today you would earn a total of 10,188 from holding Westinghouse Air Brake or generate 103.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westinghouse Air Brake vs. EvoAir Holdings
Performance |
| Timeline |
| Westinghouse Air Brake |
| EvoAir Holdings |
Westinghouse Air and EvoAir Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westinghouse Air and EvoAir Holdings
The main advantage of trading using opposite Westinghouse Air and EvoAir Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, EvoAir Holdings 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 EvoAir Holdings will offset losses from the drop in EvoAir Holdings' long position.| Westinghouse Air vs. Greenbrier Companies | Westinghouse Air vs. LB Foster | Westinghouse Air vs. CSX Corporation | Westinghouse Air vs. Norfolk Southern |
| EvoAir Holdings vs. SkyWest | EvoAir Holdings vs. Sun Country Airlines | EvoAir Holdings vs. Academy Sports Outdoors | EvoAir Holdings vs. Saia Inc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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