Correlation Between Westinghouse Air and Deutsche Invest

Can any of the company-specific risk be diversified away by investing in both Westinghouse Air and Deutsche Invest 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 Westinghouse Air and Deutsche Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Westinghouse Air Brake and Deutsche Invest I, you can compare the effects of market volatilities on Westinghouse Air and Deutsche Invest 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 Westinghouse Air with a short position of Deutsche Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westinghouse Air and Deutsche Invest.

Diversification Opportunities for Westinghouse Air and Deutsche Invest

0.0

Correlation Coefficient

Westinghouse Air  Deutsche Invest

Pay attention - limited upside

The 3 months correlation between Westinghouse and Deutsche is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Westinghouse Air Brake and Deutsche Invest I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Invest I and Westinghouse Air 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 Westinghouse Air Brake are associated (or correlated) with Deutsche Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Invest I has no effect on the direction of Westinghouse Air i.e., Westinghouse Air and Deutsche Invest go up and down completely randomly.

Pair Corralation between Westinghouse Air and Deutsche Invest

If you would invest (100.00) in Deutsche Invest I on December 24, 2024 and sell it today you would earn a total of  100.00  from holding Deutsche Invest I or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Westinghouse Air Brake  vs.  Deutsche Invest I

Westinghouse Air Brake

Risk-Adjusted Performance

Very Weak

Over the last 90 days Westinghouse Air Brake has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Deutsche Invest I

Risk-Adjusted Performance

Very Weak

Over the last 90 days Deutsche Invest I has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Deutsche Invest is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Westinghouse Air and Deutsche Invest

The main advantage of trading using opposite Westinghouse Air and Deutsche Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westinghouse Air position performs unexpectedly, Deutsche Invest 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 Deutsche Invest will offset losses from the drop in Deutsche Invest's long position.

The idea behind Westinghouse Air Brake and Deutsche Invest I pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.