Correlation Between GreenX Metals and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both GreenX Metals 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 GreenX Metals and Westlake Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenX Metals and Westlake Chemical Corp, you can compare the effects of market volatilities on GreenX Metals 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 GreenX Metals with a short position of Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and Westlake Chemical.
Diversification Opportunities for GreenX Metals and Westlake Chemical
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between GreenX and Westlake is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals 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 GreenX Metals 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 GreenX Metals 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 GreenX Metals i.e., GreenX Metals and Westlake Chemical go up and down completely randomly.
Pair Corralation between GreenX Metals and Westlake Chemical
Assuming the 90 days trading horizon GreenX Metals is expected to under-perform the Westlake Chemical. In addition to that, GreenX Metals is 1.51 times more volatile than Westlake Chemical Corp. It trades about -0.32 of its total potential returns per unit of risk. Westlake Chemical Corp is currently generating about -0.03 per unit of volatility. If you would invest 13,048 in Westlake Chemical Corp on August 31, 2024 and sell it today you would lose (164.00) from holding Westlake Chemical Corp or give up 1.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenX Metals vs. Westlake Chemical Corp
Performance |
| Timeline |
| GreenX Metals |
| Westlake Chemical Corp |
GreenX Metals and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenX Metals and Westlake Chemical
The main advantage of trading using opposite GreenX Metals and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX Metals 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.| GreenX Metals vs. Centamin PLC | GreenX Metals vs. Central Asia Metals | GreenX Metals vs. Anglo Asian Mining | GreenX Metals vs. Metals Exploration Plc |
| Westlake Chemical vs. Neometals | Westlake Chemical vs. Coor Service Management | Westlake Chemical vs. Aeorema Communications Plc | Westlake Chemical vs. JLEN Environmental Assets |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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