Correlation Between Westport Fuel and Greenbrier Companies
Can any of the company-specific risk be diversified away by investing in both Westport Fuel and Greenbrier Companies 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 Greenbrier Companies 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 Greenbrier Companies, you can compare the effects of market volatilities on Westport Fuel and Greenbrier Companies 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 Greenbrier Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westport Fuel and Greenbrier Companies.
Diversification Opportunities for Westport Fuel and Greenbrier Companies
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Westport and Greenbrier is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Westport Fuel Systems and Greenbrier Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenbrier Companies 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 Greenbrier Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenbrier Companies has no effect on the direction of Westport Fuel i.e., Westport Fuel and Greenbrier Companies go up and down completely randomly.
Pair Corralation between Westport Fuel and Greenbrier Companies
Given the investment horizon of 90 days Westport Fuel is expected to generate 124.54 times less return on investment than Greenbrier Companies. But when comparing it to its historical volatility, Westport Fuel Systems is 1.95 times less risky than Greenbrier Companies. It trades about 0.0 of its potential returns per unit of risk. Greenbrier Companies is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 5,197 in Greenbrier Companies on August 23, 2024 and sell it today you would earn a total of 1,398 from holding Greenbrier Companies or generate 26.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westport Fuel Systems vs. Greenbrier Companies
Performance |
| Timeline |
| Westport Fuel Systems |
| Greenbrier Companies |
Westport Fuel and Greenbrier Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westport Fuel and Greenbrier Companies
The main advantage of trading using opposite Westport Fuel and Greenbrier Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westport Fuel position performs unexpectedly, Greenbrier Companies 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 Greenbrier Companies will offset losses from the drop in Greenbrier Companies' long position.| Westport Fuel vs. Foresight Autonomous Holdings | Westport Fuel vs. Hyliion Holdings Corp | Westport Fuel vs. American Axle Manufacturing | Westport Fuel vs. Gentex |
| Greenbrier Companies vs. LB Foster | Greenbrier Companies vs. Freightcar America | Greenbrier Companies vs. Westinghouse Air Brake | Greenbrier Companies vs. CSX Corporation |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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