Correlation Between BCE and WESTLAKE
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By analyzing existing cross correlation between BCE Inc and WESTLAKE CHEM P, you can compare the effects of market volatilities on BCE and WESTLAKE 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 BCE with a short position of WESTLAKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and WESTLAKE.
Diversification Opportunities for BCE and WESTLAKE
Very weak diversification
The 3 months correlation between BCE and WESTLAKE is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc and WESTLAKE CHEM P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTLAKE CHEM P and BCE 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 BCE Inc are associated (or correlated) with WESTLAKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESTLAKE CHEM P has no effect on the direction of BCE i.e., BCE and WESTLAKE go up and down completely randomly.
Pair Corralation between BCE and WESTLAKE
Considering the 90-day investment horizon BCE Inc is expected to under-perform the WESTLAKE. But the stock apears to be less risky and, when comparing its historical volatility, BCE Inc is 55.53 times less risky than WESTLAKE. The stock trades about -0.06 of its potential returns per unit of risk. The WESTLAKE CHEM P is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 8,502 in WESTLAKE CHEM P on September 12, 2024 and sell it today you would lose (40.00) from holding WESTLAKE CHEM P or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 54.95% |
| Values | Daily Returns |
BCE Inc vs. WESTLAKE CHEM P
Performance |
| Timeline |
| BCE Inc |
| WESTLAKE CHEM P |
BCE and WESTLAKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCE and WESTLAKE
The main advantage of trading using opposite BCE and WESTLAKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE position performs unexpectedly, WESTLAKE 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 will offset losses from the drop in WESTLAKE's long position.The idea behind BCE Inc and WESTLAKE CHEM P pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| WESTLAKE vs. Fluent Inc | WESTLAKE vs. Barings BDC | WESTLAKE vs. Commonwealth Bank of | WESTLAKE vs. LithiumBank Resources 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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