Correlation Between GRIFFIN MINING and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both GRIFFIN MINING 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 GRIFFIN MINING and Westlake Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GRIFFIN MINING LTD and Westlake Chemical, you can compare the effects of market volatilities on GRIFFIN MINING 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 GRIFFIN MINING with a short position of Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and Westlake Chemical.
Diversification Opportunities for GRIFFIN MINING and Westlake Chemical
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GRIFFIN and Westlake is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Westlake Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westlake Chemical and GRIFFIN MINING 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 GRIFFIN MINING LTD 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 GRIFFIN MINING i.e., GRIFFIN MINING and Westlake Chemical go up and down completely randomly.
Pair Corralation between GRIFFIN MINING and Westlake Chemical
Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 1.37 times more return on investment than Westlake Chemical. However, GRIFFIN MINING is 1.37 times more volatile than Westlake Chemical. It trades about 0.12 of its potential returns per unit of risk. Westlake Chemical is currently generating about -0.01 per unit of risk. If you would invest 111.00 in GRIFFIN MINING LTD on September 1, 2024 and sell it today you would earn a total of 61.00 from holding GRIFFIN MINING LTD or generate 54.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.48% |
| Values | Daily Returns |
GRIFFIN MINING LTD vs. Westlake Chemical
Performance |
| Timeline |
| GRIFFIN MINING LTD |
| Westlake Chemical |
GRIFFIN MINING and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRIFFIN MINING and Westlake Chemical
The main advantage of trading using opposite GRIFFIN MINING and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING 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.| GRIFFIN MINING vs. Microbot Medical | GRIFFIN MINING vs. VIRGIN WINES UK | GRIFFIN MINING vs. Japan Medical Dynamic | GRIFFIN MINING vs. JAPAN TOBACCO UNSPADR12 |
| Westlake Chemical vs. PENN NATL GAMING | Westlake Chemical vs. GigaMedia | Westlake Chemical vs. HOCHSCHILD MINING | Westlake Chemical vs. TSOGO SUN GAMING |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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