Correlation Between Westinghouse Air and AOI Electronics
Can any of the company-specific risk be diversified away by investing in both Westinghouse Air and AOI 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 AOI 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 AOI Electronics Co, you can compare the effects of market volatilities on Westinghouse Air and AOI 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 AOI Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and AOI Electronics.
Diversification Opportunities for Westinghouse Air and AOI Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Westinghouse and AOI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and AOI Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOI 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 AOI Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOI Electronics has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and AOI Electronics go up and down completely randomly.
Pair Corralation between Westinghouse Air and AOI Electronics
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 | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westinghouse Air Brake vs. AOI Electronics Co
Performance |
| Timeline |
| Westinghouse Air Brake |
| AOI Electronics |
Westinghouse Air and AOI Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westinghouse Air and AOI Electronics
The main advantage of trading using opposite Westinghouse Air and AOI Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, AOI 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 AOI Electronics will offset losses from the drop in AOI Electronics' 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 |
| AOI Electronics vs. NVIDIA | AOI Electronics vs. NVIDIA | AOI Electronics vs. QUALCOMM Incorporated | AOI Electronics vs. Advanced Micro Devices |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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