Correlation Between Crombie Real and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both Crombie Real and Westinghouse Air 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 Crombie Real and Westinghouse Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crombie Real Estate and Westinghouse Air Brake, you can compare the effects of market volatilities on Crombie Real and Westinghouse Air 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 Crombie Real with a short position of Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crombie Real and Westinghouse Air.
Diversification Opportunities for Crombie Real and Westinghouse Air
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Crombie and Westinghouse is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Crombie Real Estate and Westinghouse Air Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westinghouse Air Brake and Crombie Real 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 Crombie Real Estate are associated (or correlated) with Westinghouse Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westinghouse Air Brake has no effect on the direction of Crombie Real i.e., Crombie Real and Westinghouse Air go up and down completely randomly.
Pair Corralation between Crombie Real and Westinghouse Air
Assuming the 90 days horizon Crombie Real Estate is expected to under-perform the Westinghouse Air. But the pink sheet apears to be less risky and, when comparing its historical volatility, Crombie Real Estate is 1.71 times less risky than Westinghouse Air. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Westinghouse Air Brake is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 14,190 in Westinghouse Air Brake on March 4, 2024 and sell it today you would earn a total of 2,733 from holding Westinghouse Air Brake or generate 19.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Crombie Real Estate vs. Westinghouse Air Brake
Performance |
Timeline |
Crombie Real Estate |
Westinghouse Air Brake |
Crombie Real and Westinghouse Air Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Crombie Real and Westinghouse Air
The main advantage of trading using opposite Crombie Real and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crombie Real position performs unexpectedly, Westinghouse Air 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 Westinghouse Air will offset losses from the drop in Westinghouse Air's long position.Crombie Real vs. Ashford Hospitality Trust | Crombie Real vs. Ashford Hospitality Trust | Crombie Real vs. Braemar Hotels Resorts | Crombie Real vs. Braemar Hotels Resorts |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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