Correlation Between Westlake Chemical and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both Westlake Chemical and AIR PRODCHEMICALS 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 Westlake Chemical and AIR PRODCHEMICALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westlake Chemical and AIR PRODCHEMICALS, you can compare the effects of market volatilities on Westlake Chemical and AIR PRODCHEMICALS 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 Westlake Chemical with a short position of AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westlake Chemical and AIR PRODCHEMICALS.
Diversification Opportunities for Westlake Chemical and AIR PRODCHEMICALS
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Westlake and AIR is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Westlake Chemical and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS and Westlake Chemical 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 Westlake Chemical are associated (or correlated) with AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of Westlake Chemical i.e., Westlake Chemical and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between Westlake Chemical and AIR PRODCHEMICALS
Assuming the 90 days horizon Westlake Chemical is expected to generate 14.21 times less return on investment than AIR PRODCHEMICALS. In addition to that, Westlake Chemical is 1.59 times more volatile than AIR PRODCHEMICALS. It trades about 0.02 of its total potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about 0.44 per unit of volatility. If you would invest 28,640 in AIR PRODCHEMICALS on September 2, 2024 and sell it today you would earn a total of 2,990 from holding AIR PRODCHEMICALS or generate 10.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westlake Chemical vs. AIR PRODCHEMICALS
Performance |
| Timeline |
| Westlake Chemical |
| AIR PRODCHEMICALS |
Westlake Chemical and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westlake Chemical and AIR PRODCHEMICALS
The main advantage of trading using opposite Westlake Chemical and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westlake Chemical position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.| Westlake Chemical vs. UNITED UTILITIES GR | Westlake Chemical vs. DATANG INTL POW | Westlake Chemical vs. G III Apparel Group | Westlake Chemical vs. TERADATA |
| AIR PRODCHEMICALS vs. SIVERS SEMICONDUCTORS AB | AIR PRODCHEMICALS vs. Darden Restaurants | AIR PRODCHEMICALS vs. Reliance Steel Aluminum | AIR PRODCHEMICALS vs. Q2M Managementberatung AG |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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