Correlation Between Westinghouse Air and Gatos Silver
Can any of the company-specific risk be diversified away by investing in both Westinghouse Air and Gatos Silver 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 Gatos Silver 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 Gatos Silver, you can compare the effects of market volatilities on Westinghouse Air and Gatos Silver 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 Gatos Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and Gatos Silver.
Diversification Opportunities for Westinghouse Air and Gatos Silver
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Westinghouse and Gatos is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and Gatos Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatos Silver 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 Gatos Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatos Silver has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and Gatos Silver go up and down completely randomly.
Pair Corralation between Westinghouse Air and Gatos Silver
Considering the 90-day investment horizon Westinghouse Air is expected to generate 2.08 times less return on investment than Gatos Silver. But when comparing it to its historical volatility, Westinghouse Air Brake is 3.09 times less risky than Gatos Silver. It trades about 0.13 of its potential returns per unit of risk. Gatos Silver is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 686.00 in Gatos Silver on October 16, 2024 and sell it today you would earn a total of 729.00 from holding Gatos Silver or generate 106.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westinghouse Air Brake vs. Gatos Silver
Performance |
| Timeline |
| Westinghouse Air Brake |
| Gatos Silver |
Westinghouse Air and Gatos Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westinghouse Air and Gatos Silver
The main advantage of trading using opposite Westinghouse Air and Gatos Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, Gatos Silver 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 Gatos Silver will offset losses from the drop in Gatos Silver's long position.| Westinghouse Air vs. Greenbrier Companies | Westinghouse Air vs. LB Foster | Westinghouse Air vs. Freightcar America | Westinghouse Air vs. CSX Corporation |
| Gatos Silver vs. Endeavour Silver Corp | Gatos Silver vs. Metalla Royalty Streaming | Gatos Silver vs. New Pacific Metals | Gatos Silver vs. Hecla Mining |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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