Correlation Between Ikigai Ventures and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both Ikigai Ventures 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 Ikigai Ventures and Westlake Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ikigai Ventures and Westlake Chemical Corp, you can compare the effects of market volatilities on Ikigai Ventures 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 Ikigai Ventures with a short position of Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ikigai Ventures and Westlake Chemical.
Diversification Opportunities for Ikigai Ventures and Westlake Chemical
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ikigai and Westlake is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ikigai Ventures 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 Ikigai Ventures 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 Ikigai Ventures 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 Ikigai Ventures i.e., Ikigai Ventures and Westlake Chemical go up and down completely randomly.
Pair Corralation between Ikigai Ventures and Westlake Chemical
Assuming the 90 days trading horizon Ikigai Ventures is expected to under-perform the Westlake Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Ikigai Ventures is 1.82 times less risky than Westlake Chemical. The stock trades about -0.23 of its potential returns per unit of risk. The Westlake Chemical Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 11,486 in Westlake Chemical Corp on October 24, 2024 and sell it today you would earn a total of 433.00 from holding Westlake Chemical Corp or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ikigai Ventures vs. Westlake Chemical Corp
Performance |
| Timeline |
| Ikigai Ventures |
| Westlake Chemical Corp |
Ikigai Ventures and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ikigai Ventures and Westlake Chemical
The main advantage of trading using opposite Ikigai Ventures and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ikigai Ventures 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.| Ikigai Ventures vs. Vienna Insurance Group | Ikigai Ventures vs. British American Tobacco | Ikigai Ventures vs. Gear4music Plc | Ikigai Ventures vs. Gaming Realms plc |
| Westlake Chemical vs. Hecla Mining Co | Westlake Chemical vs. Beowulf Mining | Westlake Chemical vs. McEwen Mining | Westlake Chemical vs. Bisichi Mining 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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