Correlation Between Westinghouse Air and NetSol Technologies
Can any of the company-specific risk be diversified away by investing in both Westinghouse Air and NetSol Technologies 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 NetSol Technologies 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 NetSol Technologies, you can compare the effects of market volatilities on Westinghouse Air and NetSol Technologies 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 NetSol Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and NetSol Technologies.
Diversification Opportunities for Westinghouse Air and NetSol Technologies
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Westinghouse and NetSol is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and NetSol Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetSol Technologies 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 NetSol Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetSol Technologies has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and NetSol Technologies go up and down completely randomly.
Pair Corralation between Westinghouse Air and NetSol Technologies
Considering the 90-day investment horizon Westinghouse Air Brake is expected to under-perform the NetSol Technologies. In addition to that, Westinghouse Air is 1.08 times more volatile than NetSol Technologies. It trades about -0.2 of its total potential returns per unit of risk. NetSol Technologies is currently generating about -0.06 per unit of volatility. If you would invest 260.00 in NetSol Technologies on December 1, 2024 and sell it today you would lose (9.00) from holding NetSol Technologies or give up 3.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westinghouse Air Brake vs. NetSol Technologies
Performance |
| Timeline |
| Westinghouse Air Brake |
| NetSol Technologies |
Westinghouse Air and NetSol Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westinghouse Air and NetSol Technologies
The main advantage of trading using opposite Westinghouse Air and NetSol Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, NetSol Technologies 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 NetSol Technologies will offset losses from the drop in NetSol Technologies' long position.| Westinghouse Air vs. Greenbrier Companies | Westinghouse Air vs. LB Foster | Westinghouse Air vs. Freightcar America | Westinghouse Air vs. CSX Corporation |
| NetSol Technologies vs. MIND CTI | NetSol Technologies vs. PDF Solutions | NetSol Technologies vs. Research Solutions | NetSol Technologies vs. Red Violet |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |