Correlation Between Samsung Electronics and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics 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 Samsung Electronics and Westlake Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Westlake Chemical Corp, you can compare the effects of market volatilities on Samsung Electronics 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 Samsung Electronics with a short position of Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Westlake Chemical.
Diversification Opportunities for Samsung Electronics and Westlake Chemical
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Westlake is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co 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 Samsung Electronics 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 Samsung Electronics Co 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 Samsung Electronics i.e., Samsung Electronics and Westlake Chemical go up and down completely randomly.
Pair Corralation between Samsung Electronics and Westlake Chemical
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Westlake Chemical. In addition to that, Samsung Electronics is 1.45 times more volatile than Westlake Chemical Corp. It trades about -0.11 of its total potential returns per unit of risk. Westlake Chemical Corp is currently generating about -0.14 per unit of volatility. If you would invest 14,636 in Westlake Chemical Corp on October 24, 2024 and sell it today you would lose (2,717) from holding Westlake Chemical Corp or give up 18.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Westlake Chemical Corp
Performance |
| Timeline |
| Samsung Electronics |
| Westlake Chemical Corp |
Samsung Electronics and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Westlake Chemical
The main advantage of trading using opposite Samsung Electronics and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics 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.| Samsung Electronics vs. Spotify Technology SA | Samsung Electronics vs. Sealed Air Corp | Samsung Electronics vs. Air Products Chemicals | Samsung Electronics vs. Amedeo Air Four |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |