Correlation Between GlobalData PLC and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both GlobalData PLC 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 GlobalData PLC and Westlake Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlobalData PLC and Westlake Chemical Corp, you can compare the effects of market volatilities on GlobalData PLC 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 GlobalData PLC with a short position of Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlobalData PLC and Westlake Chemical.
Diversification Opportunities for GlobalData PLC and Westlake Chemical
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between GlobalData and Westlake is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding GlobalData PLC 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 GlobalData PLC 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 GlobalData PLC 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 GlobalData PLC i.e., GlobalData PLC and Westlake Chemical go up and down completely randomly.
Pair Corralation between GlobalData PLC and Westlake Chemical
Assuming the 90 days trading horizon GlobalData PLC is expected to under-perform the Westlake Chemical. In addition to that, GlobalData PLC is 1.09 times more volatile than Westlake Chemical Corp. It trades about -0.16 of its total potential returns per unit of risk. Westlake Chemical Corp is currently generating about -0.13 per unit of volatility. If you would invest 12,961 in Westlake Chemical Corp on September 12, 2024 and sell it today you would lose (665.00) from holding Westlake Chemical Corp or give up 5.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
GlobalData PLC vs. Westlake Chemical Corp
Performance |
| Timeline |
| GlobalData PLC |
| Westlake Chemical Corp |
GlobalData PLC and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlobalData PLC and Westlake Chemical
The main advantage of trading using opposite GlobalData PLC and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlobalData PLC 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.| GlobalData PLC vs. Hong Kong Land | GlobalData PLC vs. Neometals | GlobalData PLC vs. Coor Service Management | GlobalData PLC vs. Fidelity Sustainable USD |
| Westlake Chemical vs. Hong Kong Land | Westlake Chemical vs. Neometals | Westlake Chemical vs. Coor Service Management | Westlake Chemical vs. Fidelity Sustainable USD |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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