Correlation Between Ecclesiastical Insurance and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both Ecclesiastical 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 Ecclesiastical 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 Ecclesiastical Insurance Office and Westlake Chemical Corp, you can compare the effects of market volatilities on Ecclesiastical 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 Ecclesiastical Insurance with a short position of Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecclesiastical Insurance and Westlake Chemical.
Diversification Opportunities for Ecclesiastical Insurance and Westlake Chemical
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ecclesiastical and Westlake is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ecclesiastical Insurance Offic 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 Ecclesiastical 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 Ecclesiastical Insurance Office 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 Ecclesiastical Insurance i.e., Ecclesiastical Insurance and Westlake Chemical go up and down completely randomly.
Pair Corralation between Ecclesiastical Insurance and Westlake Chemical
Assuming the 90 days trading horizon Ecclesiastical Insurance Office is expected to under-perform the Westlake Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Ecclesiastical Insurance Office is 1.68 times less risky than Westlake Chemical. The stock trades about -0.11 of its potential returns per unit of risk. The Westlake Chemical Corp is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 11,756 in Westlake Chemical Corp on October 16, 2024 and sell it today you would lose (218.00) from holding Westlake Chemical Corp or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ecclesiastical Insurance Offic vs. Westlake Chemical Corp
Performance |
| Timeline |
| Ecclesiastical Insurance |
| Westlake Chemical Corp |
Ecclesiastical Insurance and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecclesiastical Insurance and Westlake Chemical
The main advantage of trading using opposite Ecclesiastical Insurance and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecclesiastical 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.| Ecclesiastical Insurance vs. FinecoBank SpA | Ecclesiastical Insurance vs. Spotify Technology SA | Ecclesiastical Insurance vs. Moneta Money Bank | Ecclesiastical Insurance vs. Eneraqua Technologies PLC |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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