Correlation Between Westport Fuel and Sypris Solutions
Can any of the company-specific risk be diversified away by investing in both Westport Fuel and Sypris Solutions 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 Sypris Solutions 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 Sypris Solutions, you can compare the effects of market volatilities on Westport Fuel and Sypris Solutions 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 Sypris Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westport Fuel and Sypris Solutions.
Diversification Opportunities for Westport Fuel and Sypris Solutions
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Westport and Sypris is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Westport Fuel Systems and Sypris Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sypris Solutions 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 Sypris Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sypris Solutions has no effect on the direction of Westport Fuel i.e., Westport Fuel and Sypris Solutions go up and down completely randomly.
Pair Corralation between Westport Fuel and Sypris Solutions
Given the investment horizon of 90 days Westport Fuel is expected to generate 1.42 times less return on investment than Sypris Solutions. In addition to that, Westport Fuel is 1.01 times more volatile than Sypris Solutions. It trades about 0.21 of its total potential returns per unit of risk. Sypris Solutions is currently generating about 0.3 per unit of volatility. If you would invest 133.00 in Sypris Solutions on August 31, 2024 and sell it today you would earn a total of 18.00 from holding Sypris Solutions or generate 13.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westport Fuel Systems vs. Sypris Solutions
Performance |
| Timeline |
| Westport Fuel Systems |
| Sypris Solutions |
Westport Fuel and Sypris Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westport Fuel and Sypris Solutions
The main advantage of trading using opposite Westport Fuel and Sypris Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westport Fuel position performs unexpectedly, Sypris Solutions 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 Sypris Solutions will offset losses from the drop in Sypris Solutions' long position.| Westport Fuel vs. Foresight Autonomous Holdings | Westport Fuel vs. Hyliion Holdings Corp | Westport Fuel vs. American Axle Manufacturing | Westport Fuel vs. Gentex |
| Sypris Solutions vs. Monro Muffler Brake | Sypris Solutions vs. Magna International | Sypris Solutions vs. BorgWarner | Sypris Solutions vs. Mobileye Global Class |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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