Correlation Between Westlake Chemical and Centaur Media
Can any of the company-specific risk be diversified away by investing in both Westlake Chemical and Centaur Media 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 Centaur Media 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 Centaur Media, you can compare the effects of market volatilities on Westlake Chemical and Centaur Media 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 Centaur Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westlake Chemical and Centaur Media.
Diversification Opportunities for Westlake Chemical and Centaur Media
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Westlake and Centaur is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Westlake Chemical Corp and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media 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 Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of Westlake Chemical i.e., Westlake Chemical and Centaur Media go up and down completely randomly.
Pair Corralation between Westlake Chemical and Centaur Media
Assuming the 90 days trading horizon Westlake Chemical Corp is expected to under-perform the Centaur Media. In addition to that, Westlake Chemical is 1.08 times more volatile than Centaur Media. It trades about -0.44 of its total potential returns per unit of risk. Centaur Media is currently generating about 0.21 per unit of volatility. If you would invest 2,250 in Centaur Media on October 11, 2024 and sell it today you would earn a total of 100.00 from holding Centaur Media or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Westlake Chemical Corp vs. Centaur Media
Performance |
| Timeline |
| Westlake Chemical Corp |
| Centaur Media |
Westlake Chemical and Centaur Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westlake Chemical and Centaur Media
The main advantage of trading using opposite Westlake Chemical and Centaur Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westlake Chemical position performs unexpectedly, Centaur Media 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 Centaur Media will offset losses from the drop in Centaur Media's long position.| Westlake Chemical vs. Scandic Hotels Group | Westlake Chemical vs. SBM Offshore NV | Westlake Chemical vs. New Residential Investment | Westlake Chemical vs. InterContinental Hotels Group |
| Centaur Media vs. GlobalData PLC | Centaur Media vs. JD Sports Fashion | Centaur Media vs. Fonix Mobile plc | Centaur Media vs. Extra Space Storage |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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