Correlation Between Westlake Chemical and Identiv
Can any of the company-specific risk be diversified away by investing in both Westlake Chemical and Identiv 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 Identiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westlake Chemical and Identiv, you can compare the effects of market volatilities on Westlake Chemical and Identiv 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 Identiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westlake Chemical and Identiv.
Diversification Opportunities for Westlake Chemical and Identiv
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Westlake and Identiv is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Westlake Chemical and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv 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 Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of Westlake Chemical i.e., Westlake Chemical and Identiv go up and down completely randomly.
Pair Corralation between Westlake Chemical and Identiv
Assuming the 90 days horizon Westlake Chemical is expected to generate 0.42 times more return on investment than Identiv. However, Westlake Chemical is 2.36 times less risky than Identiv. It trades about 0.03 of its potential returns per unit of risk. Identiv is currently generating about -0.01 per unit of risk. If you would invest 9,989 in Westlake Chemical on September 4, 2024 and sell it today you would earn a total of 2,211 from holding Westlake Chemical or generate 22.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Westlake Chemical vs. Identiv
Performance |
| Timeline |
| Westlake Chemical |
| Identiv |
Westlake Chemical and Identiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westlake Chemical and Identiv
The main advantage of trading using opposite Westlake Chemical and Identiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westlake Chemical position performs unexpectedly, Identiv 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 Identiv will offset losses from the drop in Identiv's long position.| Westlake Chemical vs. The Sherwin Williams | Westlake Chemical vs. Dupont De Nemours | Westlake Chemical vs. Superior Plus Corp | Westlake Chemical vs. NMI Holdings |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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