Correlation Between Westinghouse Air and Mind Technology
Can any of the company-specific risk be diversified away by investing in both Westinghouse Air and Mind Technology 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 Mind Technology 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 Mind Technology, you can compare the effects of market volatilities on Westinghouse Air and Mind Technology 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 Mind Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and Mind Technology.
Diversification Opportunities for Westinghouse Air and Mind Technology
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Westinghouse and Mind is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and Mind Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mind Technology 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 Mind Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mind Technology has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and Mind Technology go up and down completely randomly.
Pair Corralation between Westinghouse Air and Mind Technology
Considering the 90-day investment horizon Westinghouse Air Brake is expected to generate 0.19 times more return on investment than Mind Technology. However, Westinghouse Air Brake is 5.21 times less risky than Mind Technology. It trades about 0.12 of its potential returns per unit of risk. Mind Technology is currently generating about -0.01 per unit of risk. If you would invest 9,977 in Westinghouse Air Brake on August 31, 2024 and sell it today you would earn a total of 10,085 from holding Westinghouse Air Brake or generate 101.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westinghouse Air Brake vs. Mind Technology
Performance |
| Timeline |
| Westinghouse Air Brake |
| Mind Technology |
Westinghouse Air and Mind Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westinghouse Air and Mind Technology
The main advantage of trading using opposite Westinghouse Air and Mind Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, Mind Technology 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 Mind Technology will offset losses from the drop in Mind Technology's long position.| Westinghouse Air vs. Greenbrier Companies | Westinghouse Air vs. LB Foster | Westinghouse Air vs. Freightcar America | Westinghouse Air vs. CSX Corporation |
| Mind Technology vs. Spectris plc | Mind Technology vs. Electro Sensors | Mind Technology vs. Sono Tek Corp | Mind Technology vs. Vishay Precision Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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