Correlation Between Intel and WESTLAKE CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Intel 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 Intel and WESTLAKE CHEMICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and WESTLAKE CHEMICAL, you can compare the effects of market volatilities on Intel 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 Intel with a short position of WESTLAKE CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and WESTLAKE CHEMICAL.
Diversification Opportunities for Intel and WESTLAKE CHEMICAL
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Intel and WESTLAKE is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Intel and WESTLAKE CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTLAKE CHEMICAL and Intel 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 Intel 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 Intel i.e., Intel and WESTLAKE CHEMICAL go up and down completely randomly.
Pair Corralation between Intel and WESTLAKE CHEMICAL
Assuming the 90 days trading horizon Intel is expected to generate 2.15 times more return on investment than WESTLAKE CHEMICAL. However, Intel is 2.15 times more volatile than WESTLAKE CHEMICAL. It trades about 0.24 of its potential returns per unit of risk. WESTLAKE CHEMICAL is currently generating about 0.04 per unit of risk. If you would invest 2,060 in Intel on September 4, 2024 and sell it today you would earn a total of 359.00 from holding Intel or generate 17.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. WESTLAKE CHEMICAL
Performance |
| Timeline |
| Intel |
| WESTLAKE CHEMICAL |
Intel and WESTLAKE CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and WESTLAKE CHEMICAL
The main advantage of trading using opposite Intel and WESTLAKE CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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.| Intel vs. WESTLAKE CHEMICAL | Intel vs. Vastned Retail NV | Intel vs. Quaker Chemical | Intel vs. SALESFORCE INC CDR |
| WESTLAKE CHEMICAL vs. Insurance Australia Group | WESTLAKE CHEMICAL vs. SBI Insurance Group | WESTLAKE CHEMICAL vs. Singapore Reinsurance | WESTLAKE CHEMICAL vs. British American Tobacco |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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