Correlation Between Odyssean Investment and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both Odyssean Investment 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 Odyssean Investment and Westlake Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odyssean Investment Trust and Westlake Chemical Corp, you can compare the effects of market volatilities on Odyssean Investment 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 Odyssean Investment with a short position of Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odyssean Investment and Westlake Chemical.
Diversification Opportunities for Odyssean Investment and Westlake Chemical
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Odyssean and Westlake is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Odyssean Investment Trust 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 Odyssean Investment 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 Odyssean Investment Trust 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 Odyssean Investment i.e., Odyssean Investment and Westlake Chemical go up and down completely randomly.
Pair Corralation between Odyssean Investment and Westlake Chemical
Assuming the 90 days trading horizon Odyssean Investment Trust is expected to under-perform the Westlake Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Odyssean Investment Trust is 1.14 times less risky than Westlake Chemical. The stock trades about -0.11 of its potential returns per unit of risk. The Westlake Chemical Corp is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 13,532 in Westlake Chemical Corp on September 12, 2024 and sell it today you would lose (1,236) from holding Westlake Chemical Corp or give up 9.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Odyssean Investment Trust vs. Westlake Chemical Corp
Performance |
| Timeline |
| Odyssean Investment Trust |
| Westlake Chemical Corp |
Odyssean Investment and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odyssean Investment and Westlake Chemical
The main advantage of trading using opposite Odyssean Investment and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odyssean Investment 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.| Odyssean Investment vs. Catalyst Media Group | Odyssean Investment vs. CATLIN GROUP | Odyssean Investment vs. Tamburi Investment Partners | Odyssean Investment vs. Magnora ASA |
| Westlake Chemical vs. Samsung Electronics Co | Westlake Chemical vs. Samsung Electronics Co | Westlake Chemical vs. Hyundai Motor | Westlake Chemical vs. Reliance Industries Ltd |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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