Correlation Between Westport Fuel and Foresight Autonomous
Can any of the company-specific risk be diversified away by investing in both Westport Fuel and Foresight Autonomous 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 Westport Fuel and Foresight Autonomous into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westport Fuel Systems and Foresight Autonomous Holdings, you can compare the effects of market volatilities on Westport Fuel and Foresight Autonomous 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 Westport Fuel with a short position of Foresight Autonomous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westport Fuel and Foresight Autonomous.
Diversification Opportunities for Westport Fuel and Foresight Autonomous
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Westport and Foresight is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Westport Fuel Systems and Foresight Autonomous Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foresight Autonomous and Westport Fuel 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 Westport Fuel Systems are associated (or correlated) with Foresight Autonomous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foresight Autonomous has no effect on the direction of Westport Fuel i.e., Westport Fuel and Foresight Autonomous go up and down completely randomly.
Pair Corralation between Westport Fuel and Foresight Autonomous
Given the investment horizon of 90 days Westport Fuel Systems is expected to generate 0.52 times more return on investment than Foresight Autonomous. However, Westport Fuel Systems is 1.92 times less risky than Foresight Autonomous. It trades about 0.01 of its potential returns per unit of risk. Foresight Autonomous Holdings is currently generating about -0.06 per unit of risk. If you would invest 431.00 in Westport Fuel Systems on August 24, 2024 and sell it today you would earn a total of 1.00 from holding Westport Fuel Systems or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Westport Fuel Systems vs. Foresight Autonomous Holdings
Performance |
| Timeline |
| Westport Fuel Systems |
| Foresight Autonomous |
Westport Fuel and Foresight Autonomous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westport Fuel and Foresight Autonomous
The main advantage of trading using opposite Westport Fuel and Foresight Autonomous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westport Fuel position performs unexpectedly, Foresight Autonomous 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 Foresight Autonomous will offset losses from the drop in Foresight Autonomous' long position.| Westport Fuel vs. Foresight Autonomous Holdings | Westport Fuel vs. Hyliion Holdings Corp | Westport Fuel vs. American Axle Manufacturing | Westport Fuel vs. Gentex |
| Foresight Autonomous vs. Aeva Technologies | Foresight Autonomous vs. Luminar Technologies | Foresight Autonomous vs. Hesai Group American | Foresight Autonomous vs. Aeye 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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