Correlation Between Westinghouse Air and METHODE ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Westinghouse Air and METHODE ELECTRONICS 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 METHODE ELECTRONICS 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 METHODE ELECTRONICS, you can compare the effects of market volatilities on Westinghouse Air and METHODE ELECTRONICS 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 METHODE ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and METHODE ELECTRONICS.
Diversification Opportunities for Westinghouse Air and METHODE ELECTRONICS
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Westinghouse and METHODE is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and METHODE ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METHODE ELECTRONICS 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 METHODE ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METHODE ELECTRONICS has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and METHODE ELECTRONICS go up and down completely randomly.
Pair Corralation between Westinghouse Air and METHODE ELECTRONICS
Assuming the 90 days horizon Westinghouse Air Brake is expected to generate 0.27 times more return on investment than METHODE ELECTRONICS. However, Westinghouse Air Brake is 3.67 times less risky than METHODE ELECTRONICS. It trades about 0.1 of its potential returns per unit of risk. METHODE ELECTRONICS is currently generating about 0.01 per unit of risk. If you would invest 15,337 in Westinghouse Air Brake on August 25, 2024 and sell it today you would earn a total of 3,158 from holding Westinghouse Air Brake or generate 20.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.24% |
| Values | Daily Returns |
Westinghouse Air Brake vs. METHODE ELECTRONICS
Performance |
| Timeline |
| Westinghouse Air Brake |
| METHODE ELECTRONICS |
Westinghouse Air and METHODE ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westinghouse Air and METHODE ELECTRONICS
The main advantage of trading using opposite Westinghouse Air and METHODE ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, METHODE ELECTRONICS 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 METHODE ELECTRONICS will offset losses from the drop in METHODE ELECTRONICS's long position.| Westinghouse Air vs. Chunghwa Telecom Co | Westinghouse Air vs. Consolidated Communications Holdings | Westinghouse Air vs. Singapore Telecommunications Limited | Westinghouse Air vs. Rogers Communications |
| METHODE ELECTRONICS vs. Apple Inc | METHODE ELECTRONICS vs. Apple Inc | METHODE ELECTRONICS vs. Apple Inc | METHODE ELECTRONICS vs. Apple Inc |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |