Correlation Between Westport Fuel and Silgan Holdings
Can any of the company-specific risk be diversified away by investing in both Westport Fuel and Silgan Holdings 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 Silgan Holdings 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 Silgan Holdings, you can compare the effects of market volatilities on Westport Fuel and Silgan Holdings 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 Silgan Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westport Fuel and Silgan Holdings.
Diversification Opportunities for Westport Fuel and Silgan Holdings
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Westport and Silgan is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Westport Fuel Systems and Silgan Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silgan Holdings 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 Silgan Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silgan Holdings has no effect on the direction of Westport Fuel i.e., Westport Fuel and Silgan Holdings go up and down completely randomly.
Pair Corralation between Westport Fuel and Silgan Holdings
Given the investment horizon of 90 days Westport Fuel is expected to generate 1.75 times less return on investment than Silgan Holdings. In addition to that, Westport Fuel is 1.76 times more volatile than Silgan Holdings. It trades about 0.14 of its total potential returns per unit of risk. Silgan Holdings is currently generating about 0.44 per unit of volatility. If you would invest 5,116 in Silgan Holdings on August 27, 2024 and sell it today you would earn a total of 596.00 from holding Silgan Holdings or generate 11.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westport Fuel Systems vs. Silgan Holdings
Performance |
| Timeline |
| Westport Fuel Systems |
| Silgan Holdings |
Westport Fuel and Silgan Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westport Fuel and Silgan Holdings
The main advantage of trading using opposite Westport Fuel and Silgan Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westport Fuel position performs unexpectedly, Silgan Holdings 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 Silgan Holdings will offset losses from the drop in Silgan Holdings' long position.| Westport Fuel vs. Foresight Autonomous Holdings | Westport Fuel vs. Hyliion Holdings Corp | Westport Fuel vs. American Axle Manufacturing | Westport Fuel vs. Gentex |
| Silgan Holdings vs. Pactiv Evergreen | Silgan Holdings vs. Myers Industries | Silgan Holdings vs. Sonoco Products | Silgan Holdings vs. Avery Dennison Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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