Correlation Between Westlake Chemical and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both Westlake Chemical and Endeavour Mining 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 Endeavour Mining 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 Endeavour Mining Corp, you can compare the effects of market volatilities on Westlake Chemical and Endeavour Mining 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 Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westlake Chemical and Endeavour Mining.
Diversification Opportunities for Westlake Chemical and Endeavour Mining
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Westlake and Endeavour is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Westlake Chemical Corp and Endeavour Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining 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 Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining Corp has no effect on the direction of Westlake Chemical i.e., Westlake Chemical and Endeavour Mining go up and down completely randomly.
Pair Corralation between Westlake Chemical and Endeavour Mining
Assuming the 90 days trading horizon Westlake Chemical Corp is expected to generate 0.89 times more return on investment than Endeavour Mining. However, Westlake Chemical Corp is 1.12 times less risky than Endeavour Mining. It trades about -0.17 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about -0.18 per unit of risk. If you would invest 12,640 in Westlake Chemical Corp on September 20, 2024 and sell it today you would lose (835.00) from holding Westlake Chemical Corp or give up 6.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Westlake Chemical Corp vs. Endeavour Mining Corp
Performance |
| Timeline |
| Westlake Chemical Corp |
| Endeavour Mining Corp |
Westlake Chemical and Endeavour Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westlake Chemical and Endeavour Mining
The main advantage of trading using opposite Westlake Chemical and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westlake Chemical position performs unexpectedly, Endeavour Mining 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 Endeavour Mining will offset losses from the drop in Endeavour Mining's long position.| Westlake Chemical vs. Empire Metals Limited | Westlake Chemical vs. AfriTin Mining | Westlake Chemical vs. METALL ZUG AG | Westlake Chemical vs. JB Hunt Transport |
| Endeavour Mining vs. Future Metals NL | Endeavour Mining vs. Westlake Chemical Corp | Endeavour Mining vs. GreenX Metals | Endeavour Mining vs. National Beverage Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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