Correlation Between GREENX METALS and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both GREENX METALS 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 GREENX METALS and Westlake Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GREENX METALS LTD and Westlake Chemical, you can compare the effects of market volatilities on GREENX METALS 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 GREENX METALS with a short position of Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and Westlake Chemical.
Diversification Opportunities for GREENX METALS and Westlake Chemical
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between GREENX and Westlake is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and Westlake Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westlake Chemical and GREENX METALS 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 GREENX METALS LTD 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 has no effect on the direction of GREENX METALS i.e., GREENX METALS and Westlake Chemical go up and down completely randomly.
Pair Corralation between GREENX METALS and Westlake Chemical
Assuming the 90 days trading horizon GREENX METALS LTD is expected to under-perform the Westlake Chemical. In addition to that, GREENX METALS is 3.61 times more volatile than Westlake Chemical. It trades about -0.06 of its total potential returns per unit of risk. Westlake Chemical is currently generating about -0.09 per unit of volatility. If you would invest 11,950 in Westlake Chemical on September 13, 2024 and sell it today you would lose (350.00) from holding Westlake Chemical or give up 2.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GREENX METALS LTD vs. Westlake Chemical
Performance |
| Timeline |
| GREENX METALS LTD |
| Westlake Chemical |
GREENX METALS and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENX METALS and Westlake Chemical
The main advantage of trading using opposite GREENX METALS and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS 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.| GREENX METALS vs. Superior Plus Corp | GREENX METALS vs. SIVERS SEMICONDUCTORS AB | GREENX METALS vs. Norsk Hydro ASA | GREENX METALS vs. Reliance Steel Aluminum |
| Westlake Chemical vs. Albemarle | Westlake Chemical vs. Superior Plus Corp | Westlake Chemical vs. SIVERS SEMICONDUCTORS AB | Westlake Chemical vs. Norsk Hydro ASA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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