Correlation Between Westinghouse Air and DAX Index
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By analyzing existing cross correlation between Westinghouse Air Brake and DAX Index, you can compare the effects of market volatilities on Westinghouse Air and DAX Index 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 DAX Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and DAX Index.
Diversification Opportunities for Westinghouse Air and DAX Index
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Westinghouse and DAX is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and DAX Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAX Index 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 DAX Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAX Index has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and DAX Index go up and down completely randomly.
Pair Corralation between Westinghouse Air and DAX Index
Assuming the 90 days horizon Westinghouse Air is expected to generate 1.17 times less return on investment than DAX Index. In addition to that, Westinghouse Air is 1.27 times more volatile than DAX Index. It trades about 0.39 of its total potential returns per unit of risk. DAX Index is currently generating about 0.59 per unit of volatility. If you would invest 2,002,466 in DAX Index on November 1, 2024 and sell it today you would earn a total of 161,287 from holding DAX Index or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westinghouse Air Brake vs. DAX Index
Performance |
| Timeline |
Westinghouse Air and DAX Index Volatility Contrast
Predicted Return Density |
| Returns |
Westinghouse Air Brake
Pair trading matchups for Westinghouse Air
DAX Index
Pair trading matchups for DAX Index
Pair Trading with Westinghouse Air and DAX Index
The main advantage of trading using opposite Westinghouse Air and DAX Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, DAX Index 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 DAX Index will offset losses from the drop in DAX Index's long position.| Westinghouse Air vs. Wizz Air Holdings | Westinghouse Air vs. AOI Electronics Co | Westinghouse Air vs. Delta Air Lines | Westinghouse Air vs. CHINA SOUTHN AIR H |
| DAX Index vs. Renesas Electronics | DAX Index vs. AIR PRODCHEMICALS | DAX Index vs. FUYO GENERAL LEASE | DAX Index vs. VIVA WINE 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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