Correlation Between Liontrust Asset and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both Liontrust Asset 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 Liontrust Asset and Westlake Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liontrust Asset Management and Westlake Chemical Corp, you can compare the effects of market volatilities on Liontrust Asset 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 Liontrust Asset with a short position of Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liontrust Asset and Westlake Chemical.
Diversification Opportunities for Liontrust Asset and Westlake Chemical
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liontrust and Westlake is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Liontrust Asset Management 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 Liontrust Asset 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 Liontrust Asset Management 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 Liontrust Asset i.e., Liontrust Asset and Westlake Chemical go up and down completely randomly.
Pair Corralation between Liontrust Asset and Westlake Chemical
Assuming the 90 days trading horizon Liontrust Asset Management is expected to generate 1.44 times more return on investment than Westlake Chemical. However, Liontrust Asset is 1.44 times more volatile than Westlake Chemical Corp. It trades about 0.37 of its potential returns per unit of risk. Westlake Chemical Corp is currently generating about -0.13 per unit of risk. If you would invest 39,818 in Liontrust Asset Management on September 13, 2024 and sell it today you would earn a total of 8,882 from holding Liontrust Asset Management or generate 22.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liontrust Asset Management vs. Westlake Chemical Corp
Performance |
| Timeline |
| Liontrust Asset Mana |
| Westlake Chemical Corp |
Liontrust Asset and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liontrust Asset and Westlake Chemical
The main advantage of trading using opposite Liontrust Asset and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liontrust Asset 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.| Liontrust Asset vs. Catalyst Media Group | Liontrust Asset vs. CATLIN GROUP | Liontrust Asset vs. Tamburi Investment Partners | Liontrust Asset vs. Magnora ASA |
| Westlake Chemical vs. Orient Telecoms | Westlake Chemical vs. Foresight Environmental Infrastructure | Westlake Chemical vs. Zegona Communications Plc | Westlake Chemical vs. Roadside Real Estate |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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