Correlation Between Heavitree Brewery and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both Heavitree Brewery 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 Heavitree Brewery and Westlake Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heavitree Brewery and Westlake Chemical Corp, you can compare the effects of market volatilities on Heavitree Brewery 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 Heavitree Brewery with a short position of Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heavitree Brewery and Westlake Chemical.
Diversification Opportunities for Heavitree Brewery and Westlake Chemical
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heavitree and Westlake is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Heavitree Brewery 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 Heavitree Brewery 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 Heavitree Brewery 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 Heavitree Brewery i.e., Heavitree Brewery and Westlake Chemical go up and down completely randomly.
Pair Corralation between Heavitree Brewery and Westlake Chemical
Assuming the 90 days trading horizon Heavitree Brewery is expected to generate 12.79 times less return on investment than Westlake Chemical. But when comparing it to its historical volatility, Heavitree Brewery is 4.33 times less risky than Westlake Chemical. It trades about 0.0 of its potential returns per unit of risk. Westlake Chemical Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 11,131 in Westlake Chemical Corp on October 9, 2024 and sell it today you would earn a total of 255.00 from holding Westlake Chemical Corp or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 80.28% |
| Values | Daily Returns |
Heavitree Brewery vs. Westlake Chemical Corp
Performance |
| Timeline |
| Heavitree Brewery |
| Westlake Chemical Corp |
Heavitree Brewery and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heavitree Brewery and Westlake Chemical
The main advantage of trading using opposite Heavitree Brewery and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heavitree Brewery 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.| Heavitree Brewery vs. Celebrus Technologies plc | Heavitree Brewery vs. Made Tech Group | Heavitree Brewery vs. GlobalData PLC | Heavitree Brewery vs. Technicolor |
| Westlake Chemical vs. Capital Drilling | Westlake Chemical vs. Sealed Air Corp | Westlake Chemical vs. Molson Coors Beverage | Westlake Chemical vs. Mindflair Plc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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