Correlation Between Westinghouse Air and Vishay Intertechnology
Can any of the company-specific risk be diversified away by investing in both Westinghouse Air and Vishay Intertechnology 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 Vishay Intertechnology 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 Vishay Intertechnology, you can compare the effects of market volatilities on Westinghouse Air and Vishay Intertechnology 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 Vishay Intertechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and Vishay Intertechnology.
Diversification Opportunities for Westinghouse Air and Vishay Intertechnology
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Westinghouse and Vishay is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology 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 Vishay Intertechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vishay Intertechnology has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and Vishay Intertechnology go up and down completely randomly.
Pair Corralation between Westinghouse Air and Vishay Intertechnology
Assuming the 90 days horizon Westinghouse Air Brake is expected to generate 0.73 times more return on investment than Vishay Intertechnology. However, Westinghouse Air Brake is 1.37 times less risky than Vishay Intertechnology. It trades about 0.1 of its potential returns per unit of risk. Vishay Intertechnology is currently generating about -0.02 per unit of risk. If you would invest 9,504 in Westinghouse Air Brake on October 26, 2024 and sell it today you would earn a total of 10,391 from holding Westinghouse Air Brake or generate 109.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westinghouse Air Brake vs. Vishay Intertechnology
Performance |
| Timeline |
| Westinghouse Air Brake |
| Vishay Intertechnology |
Westinghouse Air and Vishay Intertechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westinghouse Air and Vishay Intertechnology
The main advantage of trading using opposite Westinghouse Air and Vishay Intertechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, Vishay Intertechnology 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 Vishay Intertechnology will offset losses from the drop in Vishay Intertechnology's long position.| Westinghouse Air vs. Siamgas And Petrochemicals | Westinghouse Air vs. UNITED RENTALS | Westinghouse Air vs. Fortescue Metals Group | Westinghouse Air vs. Air Lease |
| Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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