Correlation Between TBC Bank and Westlake Chemical
Can any of the company-specific risk be diversified away by investing in both TBC Bank 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 TBC Bank and Westlake Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TBC Bank Group and Westlake Chemical Corp, you can compare the effects of market volatilities on TBC Bank 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 TBC Bank with a short position of Westlake Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of TBC Bank and Westlake Chemical.
Diversification Opportunities for TBC Bank and Westlake Chemical
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TBC and Westlake is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding TBC Bank 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 TBC Bank 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 TBC Bank 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 TBC Bank i.e., TBC Bank and Westlake Chemical go up and down completely randomly.
Pair Corralation between TBC Bank and Westlake Chemical
Assuming the 90 days trading horizon TBC Bank Group is expected to generate 0.87 times more return on investment than Westlake Chemical. However, TBC Bank Group is 1.15 times less risky than Westlake Chemical. It trades about 0.09 of its potential returns per unit of risk. Westlake Chemical Corp is currently generating about -0.15 per unit of risk. If you would invest 303,000 in TBC Bank Group on October 30, 2024 and sell it today you would earn a total of 14,500 from holding TBC Bank Group or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
TBC Bank Group vs. Westlake Chemical Corp
Performance |
| Timeline |
| TBC Bank Group |
| Westlake Chemical Corp |
TBC Bank and Westlake Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TBC Bank and Westlake Chemical
The main advantage of trading using opposite TBC Bank and Westlake Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TBC Bank 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.| TBC Bank vs. First Class Metals | TBC Bank vs. Micron Technology | TBC Bank vs. Europa Metals | TBC Bank vs. Coeur Mining |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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