Correlation Between Qurate Retail and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both Qurate Retail and Westlake Chemical 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 Qurate Retail and Westlake Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qurate Retail Series and Westlake Chemical Corp, you can compare the effects of market volatilities on Qurate Retail and Westlake Chemical 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 Qurate Retail with a short position of Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qurate Retail and Westlake Chemical.
Diversification Opportunities for Qurate Retail and Westlake Chemical
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Qurate and Westlake is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail Series and Westlake Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westlake Chemical Corp and Qurate Retail 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 Qurate Retail Series are associated (or correlated) with Westlake Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westlake Chemical Corp has no effect on the direction of Qurate Retail i.e., Qurate Retail and Westlake Chemical go up and down completely randomly.
Pair Corralation between Qurate Retail and Westlake Chemical
Assuming the 90 days trading horizon Qurate Retail Series is expected to under-perform the Westlake Chemical. In addition to that, Qurate Retail is 2.64 times more volatile than Westlake Chemical Corp. It trades about -0.02 of its total potential returns per unit of risk. Westlake Chemical Corp is currently generating about 0.04 per unit of volatility. If you would invest 9,864 in Westlake Chemical Corp on September 3, 2024 and sell it today you would earn a total of 3,000 from holding Westlake Chemical Corp or generate 30.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 75.9% |
| Values | Daily Returns |
Qurate Retail Series vs. Westlake Chemical Corp
Performance |
| Timeline |
| Qurate Retail Series |
| Westlake Chemical Corp |
Qurate Retail and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qurate Retail and Westlake Chemical
The main advantage of trading using opposite Qurate Retail and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qurate Retail position performs unexpectedly, Westlake Chemical 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 Westlake Chemical will offset losses from the drop in Westlake Chemical's long position.| Qurate Retail vs. Catalyst Media Group | Qurate Retail vs. CATLIN GROUP | Qurate Retail vs. Magnora ASA | Qurate Retail vs. RTW Venture Fund |
| Westlake Chemical vs. Qurate Retail Series | Westlake Chemical vs. JB Hunt Transport | Westlake Chemical vs. Coor Service Management | Westlake Chemical vs. Roebuck Food Group |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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