Correlation Between Westinghouse Air and Genfit
Can any of the company-specific risk be diversified away by investing in both Westinghouse Air and Genfit 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 Genfit 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 Genfit, you can compare the effects of market volatilities on Westinghouse Air and Genfit 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 Genfit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and Genfit.
Diversification Opportunities for Westinghouse Air and Genfit
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Westinghouse and Genfit is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit 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 Genfit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genfit has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and Genfit go up and down completely randomly.
Pair Corralation between Westinghouse Air and Genfit
Considering the 90-day investment horizon Westinghouse Air Brake is expected to generate 0.31 times more return on investment than Genfit. However, Westinghouse Air Brake is 3.27 times less risky than Genfit. It trades about 0.18 of its potential returns per unit of risk. Genfit is currently generating about 0.05 per unit of risk. If you would invest 11,463 in Westinghouse Air Brake on August 25, 2024 and sell it today you would earn a total of 8,452 from holding Westinghouse Air Brake or generate 73.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westinghouse Air Brake vs. Genfit
Performance |
| Timeline |
| Westinghouse Air Brake |
| Genfit |
Westinghouse Air and Genfit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westinghouse Air and Genfit
The main advantage of trading using opposite Westinghouse Air and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, Genfit 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 Genfit will offset losses from the drop in Genfit's long position.| Westinghouse Air vs. Greenbrier Companies | Westinghouse Air vs. LB Foster | Westinghouse Air vs. Freightcar America | Westinghouse Air vs. CSX Corporation |
| Genfit vs. Eliem Therapeutics | Genfit vs. HCW Biologics | Genfit vs. Scpharmaceuticals | Genfit vs. Milestone Pharmaceuticals |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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