Correlation Between Westlake Chemical and Sancus Lending
Can any of the company-specific risk be diversified away by investing in both Westlake Chemical and Sancus Lending 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 Sancus Lending 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 Sancus Lending Group, you can compare the effects of market volatilities on Westlake Chemical and Sancus Lending 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 Sancus Lending. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westlake Chemical and Sancus Lending.
Diversification Opportunities for Westlake Chemical and Sancus Lending
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Westlake and Sancus is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Westlake Chemical Corp and Sancus Lending Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sancus Lending Group 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 Sancus Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sancus Lending Group has no effect on the direction of Westlake Chemical i.e., Westlake Chemical and Sancus Lending go up and down completely randomly.
Pair Corralation between Westlake Chemical and Sancus Lending
Assuming the 90 days trading horizon Westlake Chemical Corp is expected to under-perform the Sancus Lending. But the stock apears to be less risky and, when comparing its historical volatility, Westlake Chemical Corp is 5.86 times less risky than Sancus Lending. The stock trades about -0.13 of its potential returns per unit of risk. The Sancus Lending Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Sancus Lending Group on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Sancus Lending Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Westlake Chemical Corp vs. Sancus Lending Group
Performance |
| Timeline |
| Westlake Chemical Corp |
| Sancus Lending Group |
Westlake Chemical and Sancus Lending Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westlake Chemical and Sancus Lending
The main advantage of trading using opposite Westlake Chemical and Sancus Lending positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westlake Chemical position performs unexpectedly, Sancus Lending 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 Sancus Lending will offset losses from the drop in Sancus Lending's long position.| Westlake Chemical vs. Orient Telecoms | Westlake Chemical vs. Foresight Environmental Infrastructure | Westlake Chemical vs. Zegona Communications Plc | Westlake Chemical vs. Roadside Real Estate |
| Sancus Lending vs. CAP LEASE AVIATION | Sancus Lending vs. Advanced Medical Solutions | Sancus Lending vs. Beazer Homes USA | Sancus Lending vs. Pets at Home |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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