Correlation Between Westlake Chemical and Octopus Aim
Can any of the company-specific risk be diversified away by investing in both Westlake Chemical and Octopus Aim 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 Octopus Aim 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 Octopus Aim Vct, you can compare the effects of market volatilities on Westlake Chemical and Octopus Aim 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 Octopus Aim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westlake Chemical and Octopus Aim.
Diversification Opportunities for Westlake Chemical and Octopus Aim
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Westlake and Octopus is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Westlake Chemical Corp and Octopus Aim Vct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Octopus Aim Vct 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 Octopus Aim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Octopus Aim Vct has no effect on the direction of Westlake Chemical i.e., Westlake Chemical and Octopus Aim go up and down completely randomly.
Pair Corralation between Westlake Chemical and Octopus Aim
Assuming the 90 days trading horizon Westlake Chemical Corp is expected to generate 3.32 times more return on investment than Octopus Aim. However, Westlake Chemical is 3.32 times more volatile than Octopus Aim Vct. It trades about 0.01 of its potential returns per unit of risk. Octopus Aim Vct is currently generating about -0.06 per unit of risk. If you would invest 11,226 in Westlake Chemical Corp on October 12, 2024 and sell it today you would lose (197.00) from holding Westlake Chemical Corp or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.48% |
| Values | Daily Returns |
Westlake Chemical Corp vs. Octopus Aim Vct
Performance |
| Timeline |
| Westlake Chemical Corp |
| Octopus Aim Vct |
Westlake Chemical and Octopus Aim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westlake Chemical and Octopus Aim
The main advantage of trading using opposite Westlake Chemical and Octopus Aim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westlake Chemical position performs unexpectedly, Octopus Aim 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 Octopus Aim will offset losses from the drop in Octopus Aim's long position.| Westlake Chemical vs. Auction Technology Group | Westlake Chemical vs. DXC Technology Co | Westlake Chemical vs. Optima Health plc | Westlake Chemical vs. Eco Animal Health |
| Octopus Aim vs. Golden Metal Resources | Octopus Aim vs. Aeorema Communications Plc | Octopus Aim vs. Jacquet Metal Service | Octopus Aim vs. Fulcrum Metals PLC |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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