Correlation Between Weir Group and Ballard Power
Can any of the company-specific risk be diversified away by investing in both Weir Group and Ballard Power 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 Weir Group and Ballard Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weir Group PLC and Ballard Power Systems, you can compare the effects of market volatilities on Weir Group and Ballard Power 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 Weir Group with a short position of Ballard Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weir Group and Ballard Power.
Diversification Opportunities for Weir Group and Ballard Power
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Weir and Ballard is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Weir Group PLC and Ballard Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballard Power Systems and Weir Group 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 Weir Group PLC are associated (or correlated) with Ballard Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballard Power Systems has no effect on the direction of Weir Group i.e., Weir Group and Ballard Power go up and down completely randomly.
Pair Corralation between Weir Group and Ballard Power
Assuming the 90 days horizon Weir Group PLC is expected to generate 0.45 times more return on investment than Ballard Power. However, Weir Group PLC is 2.21 times less risky than Ballard Power. It trades about 0.05 of its potential returns per unit of risk. Ballard Power Systems is currently generating about -0.05 per unit of risk. If you would invest 978.00 in Weir Group PLC on September 2, 2024 and sell it today you would earn a total of 431.00 from holding Weir Group PLC or generate 44.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.78% |
| Values | Daily Returns |
Weir Group PLC vs. Ballard Power Systems
Performance |
| Timeline |
| Weir Group PLC |
| Ballard Power Systems |
Weir Group and Ballard Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weir Group and Ballard Power
The main advantage of trading using opposite Weir Group and Ballard Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weir Group position performs unexpectedly, Ballard Power 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 Ballard Power will offset losses from the drop in Ballard Power's long position.| Weir Group vs. Greenshift Corp | Weir Group vs. Next Hydrogen Solutions | Weir Group vs. Quality Industrial Corp | Weir Group vs. Titan Logix Corp |
| Ballard Power vs. Emerson Electric | Ballard Power vs. Eaton PLC | Ballard Power vs. Parker Hannifin | Ballard Power vs. Illinois Tool Works |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |