Correlation Between FinecoBank SpA and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both FinecoBank SpA and Westlake Chemical 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 FinecoBank SpA and Westlake Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FinecoBank SpA and Westlake Chemical Corp, you can compare the effects of market volatilities on FinecoBank SpA and Westlake Chemical 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 FinecoBank SpA with a short position of Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of FinecoBank SpA and Westlake Chemical.
Diversification Opportunities for FinecoBank SpA and Westlake Chemical
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FinecoBank and Westlake is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding FinecoBank SpA and Westlake Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westlake Chemical Corp and FinecoBank SpA 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 FinecoBank SpA are associated (or correlated) with Westlake Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westlake Chemical Corp has no effect on the direction of FinecoBank SpA i.e., FinecoBank SpA and Westlake Chemical go up and down completely randomly.
Pair Corralation between FinecoBank SpA and Westlake Chemical
Assuming the 90 days trading horizon FinecoBank SpA is expected to generate 0.71 times more return on investment than Westlake Chemical. However, FinecoBank SpA is 1.41 times less risky than Westlake Chemical. It trades about 0.08 of its potential returns per unit of risk. Westlake Chemical Corp is currently generating about -0.01 per unit of risk. If you would invest 1,204 in FinecoBank SpA on October 16, 2024 and sell it today you would earn a total of 512.00 from holding FinecoBank SpA or generate 42.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 81.87% |
| Values | Daily Returns |
FinecoBank SpA vs. Westlake Chemical Corp
Performance |
| Timeline |
| FinecoBank SpA |
| Westlake Chemical Corp |
FinecoBank SpA and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FinecoBank SpA and Westlake Chemical
The main advantage of trading using opposite FinecoBank SpA and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FinecoBank SpA position performs unexpectedly, Westlake Chemical 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 Westlake Chemical will offset losses from the drop in Westlake Chemical's long position.| FinecoBank SpA vs. Jacquet Metal Service | FinecoBank SpA vs. Europa Metals | FinecoBank SpA vs. GreenX Metals | FinecoBank SpA vs. Cornish Metals |
| Westlake Chemical vs. Hochschild Mining plc | Westlake Chemical vs. TBC Bank Group | Westlake Chemical vs. Zegona Communications Plc | Westlake Chemical vs. FinecoBank SpA |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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