Correlation Between Westinghouse Air and Nisshinbo Holdings
Can any of the company-specific risk be diversified away by investing in both Westinghouse Air and Nisshinbo Holdings 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 Nisshinbo Holdings 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 Nisshinbo Holdings, you can compare the effects of market volatilities on Westinghouse Air and Nisshinbo Holdings 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 Nisshinbo Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and Nisshinbo Holdings.
Diversification Opportunities for Westinghouse Air and Nisshinbo Holdings
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Westinghouse and Nisshinbo is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and Nisshinbo Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nisshinbo Holdings 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 Nisshinbo Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nisshinbo Holdings has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and Nisshinbo Holdings go up and down completely randomly.
Pair Corralation between Westinghouse Air and Nisshinbo Holdings
Assuming the 90 days horizon Westinghouse Air Brake is expected to under-perform the Nisshinbo Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Westinghouse Air Brake is 1.64 times less risky than Nisshinbo Holdings. The stock trades about -0.12 of its potential returns per unit of risk. The Nisshinbo Holdings is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 540.00 in Nisshinbo Holdings on September 25, 2024 and sell it today you would lose (15.00) from holding Nisshinbo Holdings or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westinghouse Air Brake vs. Nisshinbo Holdings
Performance |
| Timeline |
| Westinghouse Air Brake |
| Nisshinbo Holdings |
Westinghouse Air and Nisshinbo Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westinghouse Air and Nisshinbo Holdings
The main advantage of trading using opposite Westinghouse Air and Nisshinbo Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, Nisshinbo Holdings 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 Nisshinbo Holdings will offset losses from the drop in Nisshinbo Holdings' long position.| Westinghouse Air vs. Canadian National Railway | Westinghouse Air vs. MTR Limited | Westinghouse Air vs. CRRC Limited | Westinghouse Air vs. Central Japan Railway |
| Nisshinbo Holdings vs. Harmony Gold Mining | Nisshinbo Holdings vs. JSC Halyk bank | Nisshinbo Holdings vs. Chiba Bank | Nisshinbo Holdings vs. REVO INSURANCE SPA |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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