Correlation Between Westlake Chemical and Check Point
Can any of the company-specific risk be diversified away by investing in both Westlake Chemical and Check Point 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 Check Point 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 Check Point Software, you can compare the effects of market volatilities on Westlake Chemical and Check Point 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 Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westlake Chemical and Check Point.
Diversification Opportunities for Westlake Chemical and Check Point
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Westlake and Check is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Westlake Chemical Corp and Check Point Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Point Software 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 Check Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Point Software has no effect on the direction of Westlake Chemical i.e., Westlake Chemical and Check Point go up and down completely randomly.
Pair Corralation between Westlake Chemical and Check Point
Assuming the 90 days trading horizon Westlake Chemical Corp is expected to generate 1.05 times more return on investment than Check Point. However, Westlake Chemical is 1.05 times more volatile than Check Point Software. It trades about 0.12 of its potential returns per unit of risk. Check Point Software is currently generating about 0.08 per unit of risk. If you would invest 11,465 in Westlake Chemical Corp on October 25, 2024 and sell it today you would earn a total of 357.00 from holding Westlake Chemical Corp or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Westlake Chemical Corp vs. Check Point Software
Performance |
| Timeline |
| Westlake Chemical Corp |
| Check Point Software |
Westlake Chemical and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westlake Chemical and Check Point
The main advantage of trading using opposite Westlake Chemical and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westlake Chemical position performs unexpectedly, Check Point 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 Check Point will offset losses from the drop in Check Point's long position.| Westlake Chemical vs. Futura Medical | Westlake Chemical vs. Ebro Foods | Westlake Chemical vs. Rheinmetall AG | Westlake Chemical vs. Coeur Mining |
| Check Point vs. Virgin Wines UK | Check Point vs. CleanTech Lithium plc | Check Point vs. Naked Wines plc | Check Point vs. Centaur Media |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |