Correlation Between WESTLAKE CHEMICAL and Check Point
Can any of the company-specific risk be diversified away by investing in both WESTLAKE CHEMICAL and Check Point 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 Check Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WESTLAKE CHEMICAL and Check Point Software, you can compare the effects of market volatilities on WESTLAKE CHEMICAL and Check Point 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 Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of WESTLAKE CHEMICAL and Check Point.
Diversification Opportunities for WESTLAKE CHEMICAL and Check Point
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WESTLAKE and Check is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding WESTLAKE CHEMICAL and Check Point Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Point Software 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 Check Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Point Software has no effect on the direction of WESTLAKE CHEMICAL i.e., WESTLAKE CHEMICAL and Check Point go up and down completely randomly.
Pair Corralation between WESTLAKE CHEMICAL and Check Point
Assuming the 90 days trading horizon WESTLAKE CHEMICAL is expected to generate 3.48 times less return on investment than Check Point. In addition to that, WESTLAKE CHEMICAL is 1.02 times more volatile than Check Point Software. It trades about 0.02 of its total potential returns per unit of risk. Check Point Software is currently generating about 0.07 per unit of volatility. If you would invest 12,730 in Check Point Software on September 4, 2024 and sell it today you would earn a total of 4,700 from holding Check Point Software or generate 36.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
WESTLAKE CHEMICAL vs. Check Point Software
Performance |
| Timeline |
| WESTLAKE CHEMICAL |
| Check Point Software |
WESTLAKE CHEMICAL and Check Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WESTLAKE CHEMICAL and Check Point
The main advantage of trading using opposite WESTLAKE CHEMICAL and Check Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WESTLAKE CHEMICAL position performs unexpectedly, Check Point 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 Check Point will offset losses from the drop in Check Point's long position.| WESTLAKE CHEMICAL vs. Insurance Australia Group | WESTLAKE CHEMICAL vs. SBI Insurance Group | WESTLAKE CHEMICAL vs. Singapore Reinsurance | WESTLAKE CHEMICAL vs. British American Tobacco |
| Check Point vs. TOTAL GABON | Check Point vs. Walgreens Boots Alliance | Check Point vs. Peak Resources Limited |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |