Correlation Between Westlake Chemical and FIH Mobile
Can any of the company-specific risk be diversified away by investing in both Westlake Chemical and FIH Mobile 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 FIH Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westlake Chemical and FIH Mobile Limited, you can compare the effects of market volatilities on Westlake Chemical and FIH Mobile 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 FIH Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westlake Chemical and FIH Mobile.
Diversification Opportunities for Westlake Chemical and FIH Mobile
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Westlake and FIH is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Westlake Chemical and FIH Mobile Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIH Mobile Limited 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 FIH Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIH Mobile Limited has no effect on the direction of Westlake Chemical i.e., Westlake Chemical and FIH Mobile go up and down completely randomly.
Pair Corralation between Westlake Chemical and FIH Mobile
Assuming the 90 days horizon Westlake Chemical is expected to generate 11.33 times less return on investment than FIH Mobile. But when comparing it to its historical volatility, Westlake Chemical is 2.48 times less risky than FIH Mobile. It trades about 0.02 of its potential returns per unit of risk. FIH Mobile Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9.40 in FIH Mobile Limited on September 2, 2024 and sell it today you would earn a total of 0.60 from holding FIH Mobile Limited or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westlake Chemical vs. FIH Mobile Limited
Performance |
| Timeline |
| Westlake Chemical |
| FIH Mobile Limited |
Westlake Chemical and FIH Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westlake Chemical and FIH Mobile
The main advantage of trading using opposite Westlake Chemical and FIH Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westlake Chemical position performs unexpectedly, FIH Mobile 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 FIH Mobile will offset losses from the drop in FIH Mobile'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 |
| FIH Mobile vs. VIRG NATL BANKSH | FIH Mobile vs. Chesapeake Utilities | FIH Mobile vs. Scientific Games | FIH Mobile vs. JSC Halyk bank |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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