Correlation Between Westinghouse Air and ÜSTRA Hannoversche
Can any of the company-specific risk be diversified away by investing in both Westinghouse Air and ÜSTRA Hannoversche 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 ÜSTRA Hannoversche 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 STRA Hannoversche Verkehrsbetriebe, you can compare the effects of market volatilities on Westinghouse Air and ÜSTRA Hannoversche 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 ÜSTRA Hannoversche. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and ÜSTRA Hannoversche.
Diversification Opportunities for Westinghouse Air and ÜSTRA Hannoversche
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Westinghouse and ÜSTRA is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and STRA Hannoversche Verkehrsbetr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ÜSTRA Hannoversche 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 ÜSTRA Hannoversche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ÜSTRA Hannoversche has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and ÜSTRA Hannoversche go up and down completely randomly.
Pair Corralation between Westinghouse Air and ÜSTRA Hannoversche
Assuming the 90 days horizon Westinghouse Air Brake is expected to generate 0.34 times more return on investment than ÜSTRA Hannoversche. However, Westinghouse Air Brake is 2.97 times less risky than ÜSTRA Hannoversche. It trades about 0.1 of its potential returns per unit of risk. STRA Hannoversche Verkehrsbetriebe is currently generating about 0.02 per unit of risk. If you would invest 9,483 in Westinghouse Air Brake on September 2, 2024 and sell it today you would earn a total of 9,592 from holding Westinghouse Air Brake or generate 101.15% 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. STRA Hannoversche Verkehrsbetr
Performance |
| Timeline |
| Westinghouse Air Brake |
| ÜSTRA Hannoversche |
Westinghouse Air and ÜSTRA Hannoversche Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westinghouse Air and ÜSTRA Hannoversche
The main advantage of trading using opposite Westinghouse Air and ÜSTRA Hannoversche positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, ÜSTRA Hannoversche 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 ÜSTRA Hannoversche will offset losses from the drop in ÜSTRA Hannoversche's long position.| Westinghouse Air vs. Union Pacific | Westinghouse Air vs. Superior Plus Corp | Westinghouse Air vs. NMI Holdings | Westinghouse Air vs. Origin Agritech |
| ÜSTRA Hannoversche vs. SCANDMEDICAL SOLDK 040 | ÜSTRA Hannoversche vs. MGIC INVESTMENT | ÜSTRA Hannoversche vs. HK Electric Investments | ÜSTRA Hannoversche vs. MEDICAL FACILITIES NEW |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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