Correlation Between Westinghouse Air and Japan Asia
Can any of the company-specific risk be diversified away by investing in both Westinghouse Air and Japan Asia 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 Japan Asia 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 Japan Asia Investment, you can compare the effects of market volatilities on Westinghouse Air and Japan Asia 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 Japan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and Japan Asia.
Diversification Opportunities for Westinghouse Air and Japan Asia
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Westinghouse and Japan is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and Japan Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Asia Investment 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 Japan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Asia Investment has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and Japan Asia go up and down completely randomly.
Pair Corralation between Westinghouse Air and Japan Asia
Assuming the 90 days horizon Westinghouse Air Brake is expected to generate 0.74 times more return on investment than Japan Asia. However, Westinghouse Air Brake is 1.35 times less risky than Japan Asia. It trades about 0.06 of its potential returns per unit of risk. Japan Asia Investment is currently generating about -0.04 per unit of risk. If you would invest 19,165 in Westinghouse Air Brake on October 23, 2024 and sell it today you would earn a total of 420.00 from holding Westinghouse Air Brake or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westinghouse Air Brake vs. Japan Asia Investment
Performance |
| Timeline |
| Westinghouse Air Brake |
| Japan Asia Investment |
Westinghouse Air and Japan Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westinghouse Air and Japan Asia
The main advantage of trading using opposite Westinghouse Air and Japan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, Japan Asia 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 Japan Asia will offset losses from the drop in Japan Asia'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 |
| Japan Asia vs. Blackstone Group | Japan Asia vs. The Bank of | Japan Asia vs. Ameriprise Financial | Japan Asia vs. State Street |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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