Correlation Between Roebuck Food and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both Roebuck Food 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 Roebuck Food and Westlake Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roebuck Food Group and Westlake Chemical Corp, you can compare the effects of market volatilities on Roebuck Food 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 Roebuck Food with a short position of Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roebuck Food and Westlake Chemical.
Diversification Opportunities for Roebuck Food and Westlake Chemical
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Roebuck and Westlake is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Roebuck Food 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 Roebuck Food 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 Roebuck Food 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 Roebuck Food i.e., Roebuck Food and Westlake Chemical go up and down completely randomly.
Pair Corralation between Roebuck Food and Westlake Chemical
Assuming the 90 days trading horizon Roebuck Food Group is expected to generate 0.63 times more return on investment than Westlake Chemical. However, Roebuck Food Group is 1.58 times less risky than Westlake Chemical. It trades about 0.05 of its potential returns per unit of risk. Westlake Chemical Corp is currently generating about 0.03 per unit of risk. If you would invest 1,450 in Roebuck Food Group on September 4, 2024 and sell it today you would earn a total of 230.00 from holding Roebuck Food Group or generate 15.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.56% |
| Values | Daily Returns |
Roebuck Food Group vs. Westlake Chemical Corp
Performance |
| Timeline |
| Roebuck Food Group |
| Westlake Chemical Corp |
Roebuck Food and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roebuck Food and Westlake Chemical
The main advantage of trading using opposite Roebuck Food and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roebuck Food 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.| Roebuck Food vs. Lendinvest PLC | Roebuck Food vs. Home Depot | Roebuck Food vs. National Bank of | Roebuck Food vs. St Galler Kantonalbank |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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