Correlation Between Westlake Chemical and Boston Scientific
Can any of the company-specific risk be diversified away by investing in both Westlake Chemical and Boston Scientific 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 Westlake Chemical and Boston Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westlake Chemical Corp and Boston Scientific Corp, you can compare the effects of market volatilities on Westlake Chemical and Boston Scientific 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 Westlake Chemical with a short position of Boston Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westlake Chemical and Boston Scientific.
Diversification Opportunities for Westlake Chemical and Boston Scientific
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Westlake and Boston is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Westlake Chemical Corp and Boston Scientific Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Scientific Corp and Westlake Chemical 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 Westlake Chemical Corp are associated (or correlated) with Boston Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Scientific Corp has no effect on the direction of Westlake Chemical i.e., Westlake Chemical and Boston Scientific go up and down completely randomly.
Pair Corralation between Westlake Chemical and Boston Scientific
If you would invest 11,416 in Westlake Chemical Corp on October 30, 2024 and sell it today you would earn a total of 207.00 from holding Westlake Chemical Corp or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Westlake Chemical Corp vs. Boston Scientific Corp
Performance |
| Timeline |
| Westlake Chemical Corp |
| Boston Scientific Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Westlake Chemical and Boston Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westlake Chemical and Boston Scientific
The main advantage of trading using opposite Westlake Chemical and Boston Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westlake Chemical position performs unexpectedly, Boston Scientific 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 Boston Scientific will offset losses from the drop in Boston Scientific's long position.| Westlake Chemical vs. China Pacific Insurance | Westlake Chemical vs. Monks Investment Trust | Westlake Chemical vs. Aeorema Communications Plc | Westlake Chemical vs. Ecclesiastical Insurance Office |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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