Correlation Between Westlake Chemical and Infrastrutture Wireless
Can any of the company-specific risk be diversified away by investing in both Westlake Chemical and Infrastrutture Wireless 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 Infrastrutture Wireless 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 Infrastrutture Wireless Italiane, you can compare the effects of market volatilities on Westlake Chemical and Infrastrutture Wireless 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 Infrastrutture Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westlake Chemical and Infrastrutture Wireless.
Diversification Opportunities for Westlake Chemical and Infrastrutture Wireless
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Westlake and Infrastrutture is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Westlake Chemical Corp and Infrastrutture Wireless Italia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infrastrutture Wireless 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 Infrastrutture Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infrastrutture Wireless has no effect on the direction of Westlake Chemical i.e., Westlake Chemical and Infrastrutture Wireless go up and down completely randomly.
Pair Corralation between Westlake Chemical and Infrastrutture Wireless
Assuming the 90 days trading horizon Westlake Chemical Corp is expected to generate 2.07 times more return on investment than Infrastrutture Wireless. However, Westlake Chemical is 2.07 times more volatile than Infrastrutture Wireless Italiane. It trades about 0.04 of its potential returns per unit of risk. Infrastrutture Wireless Italiane is currently generating about 0.02 per unit of risk. 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 | Significant |
| Accuracy | 76.66% |
| Values | Daily Returns |
Westlake Chemical Corp vs. Infrastrutture Wireless Italia
Performance |
| Timeline |
| Westlake Chemical Corp |
| Infrastrutture Wireless |
Westlake Chemical and Infrastrutture Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westlake Chemical and Infrastrutture Wireless
The main advantage of trading using opposite Westlake Chemical and Infrastrutture Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westlake Chemical position performs unexpectedly, Infrastrutture Wireless 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 Infrastrutture Wireless will offset losses from the drop in Infrastrutture Wireless' long position.| Westlake Chemical vs. Qurate Retail Series | Westlake Chemical vs. JB Hunt Transport | Westlake Chemical vs. Coor Service Management | Westlake Chemical vs. Roebuck Food Group |
| Infrastrutture Wireless vs. Catalyst Media Group | Infrastrutture Wireless vs. CATLIN GROUP | Infrastrutture Wireless vs. Magnora ASA | Infrastrutture Wireless vs. RTW Venture Fund |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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