Correlation Between SBI Insurance and WESTLAKE CHEMICAL
Can any of the company-specific risk be diversified away by investing in both SBI Insurance 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 SBI Insurance and WESTLAKE CHEMICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Insurance Group and WESTLAKE CHEMICAL, you can compare the effects of market volatilities on SBI Insurance 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 SBI Insurance with a short position of WESTLAKE CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Insurance and WESTLAKE CHEMICAL.
Diversification Opportunities for SBI Insurance and WESTLAKE CHEMICAL
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SBI and WESTLAKE is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group and WESTLAKE CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTLAKE CHEMICAL and SBI Insurance 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 SBI Insurance Group 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 SBI Insurance i.e., SBI Insurance and WESTLAKE CHEMICAL go up and down completely randomly.
Pair Corralation between SBI Insurance and WESTLAKE CHEMICAL
Assuming the 90 days trading horizon SBI Insurance is expected to generate 3.07 times less return on investment than WESTLAKE CHEMICAL. In addition to that, SBI Insurance is 1.08 times more volatile than WESTLAKE CHEMICAL. It trades about 0.01 of its total potential returns per unit of risk. WESTLAKE CHEMICAL is currently generating about 0.03 per unit of volatility. If you would invest 9,554 in WESTLAKE CHEMICAL on September 12, 2024 and sell it today you would earn a total of 2,046 from holding WESTLAKE CHEMICAL or generate 21.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Insurance Group vs. WESTLAKE CHEMICAL
Performance |
| Timeline |
| SBI Insurance Group |
| WESTLAKE CHEMICAL |
SBI Insurance and WESTLAKE CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Insurance and WESTLAKE CHEMICAL
The main advantage of trading using opposite SBI Insurance and WESTLAKE CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Insurance 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.| SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc |
| WESTLAKE CHEMICAL vs. Apple Inc | WESTLAKE CHEMICAL vs. Apple Inc | WESTLAKE CHEMICAL vs. Apple Inc | WESTLAKE CHEMICAL vs. Apple Inc |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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