Correlation Between CRYOLIFE and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both CRYOLIFE 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 CRYOLIFE and Westlake Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRYOLIFE and Westlake Chemical, you can compare the effects of market volatilities on CRYOLIFE 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 CRYOLIFE with a short position of Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRYOLIFE and Westlake Chemical.
Diversification Opportunities for CRYOLIFE and Westlake Chemical
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CRYOLIFE and Westlake is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CRYOLIFE and Westlake Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westlake Chemical and CRYOLIFE 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 CRYOLIFE 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 CRYOLIFE i.e., CRYOLIFE and Westlake Chemical go up and down completely randomly.
Pair Corralation between CRYOLIFE and Westlake Chemical
Assuming the 90 days trading horizon CRYOLIFE is expected to generate 1.44 times more return on investment than Westlake Chemical. However, CRYOLIFE is 1.44 times more volatile than Westlake Chemical. It trades about 0.08 of its potential returns per unit of risk. Westlake Chemical is currently generating about 0.03 per unit of risk. If you would invest 1,220 in CRYOLIFE on September 3, 2024 and sell it today you would earn a total of 1,515 from holding CRYOLIFE or generate 124.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CRYOLIFE vs. Westlake Chemical
Performance |
| Timeline |
| CRYOLIFE |
| Westlake Chemical |
CRYOLIFE and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRYOLIFE and Westlake Chemical
The main advantage of trading using opposite CRYOLIFE and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRYOLIFE 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.| CRYOLIFE vs. Westlake Chemical | CRYOLIFE vs. Soken Chemical Engineering | CRYOLIFE vs. Perseus Mining Limited | CRYOLIFE vs. MCEWEN MINING INC |
| Westlake Chemical vs. The Sherwin Williams | Westlake Chemical vs. Dupont De Nemours | Westlake Chemical vs. Superior Plus Corp | Westlake Chemical vs. NMI Holdings |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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