Correlation Between Intermediate Capital and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both Intermediate Capital 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 Intermediate Capital and Westlake Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermediate Capital Group and Westlake Chemical Corp, you can compare the effects of market volatilities on Intermediate Capital 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 Intermediate Capital with a short position of Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Capital and Westlake Chemical.
Diversification Opportunities for Intermediate Capital and Westlake Chemical
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Intermediate and Westlake is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Capital Group 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 Intermediate Capital 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 Intermediate Capital 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 Corp has no effect on the direction of Intermediate Capital i.e., Intermediate Capital and Westlake Chemical go up and down completely randomly.
Pair Corralation between Intermediate Capital and Westlake Chemical
Assuming the 90 days trading horizon Intermediate Capital Group is expected to generate 0.85 times more return on investment than Westlake Chemical. However, Intermediate Capital Group is 1.18 times less risky than Westlake Chemical. It trades about 0.07 of its potential returns per unit of risk. Westlake Chemical Corp is currently generating about 0.0 per unit of risk. If you would invest 131,210 in Intermediate Capital Group on November 5, 2024 and sell it today you would earn a total of 105,790 from holding Intermediate Capital Group or generate 80.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.33% |
| Values | Daily Returns |
Intermediate Capital Group vs. Westlake Chemical Corp
Performance |
| Timeline |
| Intermediate Capital |
| Westlake Chemical Corp |
Intermediate Capital and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Capital and Westlake Chemical
The main advantage of trading using opposite Intermediate Capital and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Capital 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.| Intermediate Capital vs. McEwen Mining | Intermediate Capital vs. Eastinco Mining Exploration | Intermediate Capital vs. Hochschild Mining plc | Intermediate Capital vs. Empire Metals Limited |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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