Correlation Between Westinghouse Air and NORDIC HALIBUT
Can any of the company-specific risk be diversified away by investing in both Westinghouse Air and NORDIC HALIBUT 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 NORDIC HALIBUT 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 NORDIC HALIBUT AS, you can compare the effects of market volatilities on Westinghouse Air and NORDIC HALIBUT 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 NORDIC HALIBUT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and NORDIC HALIBUT.
Diversification Opportunities for Westinghouse Air and NORDIC HALIBUT
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Westinghouse and NORDIC is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and NORDIC HALIBUT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORDIC HALIBUT AS 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 NORDIC HALIBUT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORDIC HALIBUT AS has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and NORDIC HALIBUT go up and down completely randomly.
Pair Corralation between Westinghouse Air and NORDIC HALIBUT
Assuming the 90 days horizon Westinghouse Air Brake is expected to generate 0.37 times more return on investment than NORDIC HALIBUT. However, Westinghouse Air Brake is 2.72 times less risky than NORDIC HALIBUT. It trades about 0.42 of its potential returns per unit of risk. NORDIC HALIBUT AS is currently generating about -0.03 per unit of risk. If you would invest 18,450 in Westinghouse Air Brake on October 23, 2024 and sell it today you would earn a total of 1,135 from holding Westinghouse Air Brake or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westinghouse Air Brake vs. NORDIC HALIBUT AS
Performance |
| Timeline |
| Westinghouse Air Brake |
| NORDIC HALIBUT AS |
Westinghouse Air and NORDIC HALIBUT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westinghouse Air and NORDIC HALIBUT
The main advantage of trading using opposite Westinghouse Air and NORDIC HALIBUT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, NORDIC HALIBUT 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 NORDIC HALIBUT will offset losses from the drop in NORDIC HALIBUT's long position.| Westinghouse Air vs. Corporate Travel Management | Westinghouse Air vs. SAFEROADS HLDGS | Westinghouse Air vs. Air Transport Services | Westinghouse Air vs. Treasury Wine Estates |
| NORDIC HALIBUT vs. Brockhaus Capital Management | NORDIC HALIBUT vs. Ares Management Corp | NORDIC HALIBUT vs. LANDSEA GREEN MANAGEMENT | NORDIC HALIBUT vs. UNIQA INSURANCE GR |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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