Correlation Between Westinghouse Air and WT OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Westinghouse Air and WT OFFSHORE 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 WT OFFSHORE 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 WT OFFSHORE, you can compare the effects of market volatilities on Westinghouse Air and WT OFFSHORE 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 WT OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and WT OFFSHORE.
Diversification Opportunities for Westinghouse Air and WT OFFSHORE
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Westinghouse and UWV is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and WT OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT OFFSHORE 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 WT OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT OFFSHORE has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and WT OFFSHORE go up and down completely randomly.
Pair Corralation between Westinghouse Air and WT OFFSHORE
Assuming the 90 days horizon Westinghouse Air Brake is expected to generate 0.42 times more return on investment than WT OFFSHORE. However, Westinghouse Air Brake is 2.39 times less risky than WT OFFSHORE. It trades about 0.25 of its potential returns per unit of risk. WT OFFSHORE is currently generating about -0.03 per unit of risk. If you would invest 18,650 in Westinghouse Air Brake on November 7, 2024 and sell it today you would earn a total of 1,245 from holding Westinghouse Air Brake or generate 6.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Westinghouse Air Brake vs. WT OFFSHORE
Performance |
| Timeline |
| Westinghouse Air Brake |
| WT OFFSHORE |
Westinghouse Air and WT OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westinghouse Air and WT OFFSHORE
The main advantage of trading using opposite Westinghouse Air and WT OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, WT OFFSHORE 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 WT OFFSHORE will offset losses from the drop in WT OFFSHORE's long position.| Westinghouse Air vs. CyberArk Software | Westinghouse Air vs. Magic Software Enterprises | Westinghouse Air vs. Alfa Financial Software | Westinghouse Air vs. CHIBA BANK |
| WT OFFSHORE vs. Apple Inc | WT OFFSHORE vs. Apple Inc | WT OFFSHORE vs. Apple Inc | WT OFFSHORE 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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