Correlation Between WESTLAKE CHEMICAL and Stryker
Can any of the company-specific risk be diversified away by investing in both WESTLAKE CHEMICAL and Stryker 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 Stryker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WESTLAKE CHEMICAL and Stryker, you can compare the effects of market volatilities on WESTLAKE CHEMICAL and Stryker 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 Stryker. Check out your portfolio center. Please also check ongoing floating volatility patterns of WESTLAKE CHEMICAL and Stryker.
Diversification Opportunities for WESTLAKE CHEMICAL and Stryker
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WESTLAKE and Stryker is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding WESTLAKE CHEMICAL and Stryker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stryker 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 Stryker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stryker has no effect on the direction of WESTLAKE CHEMICAL i.e., WESTLAKE CHEMICAL and Stryker go up and down completely randomly.
Pair Corralation between WESTLAKE CHEMICAL and Stryker
Assuming the 90 days trading horizon WESTLAKE CHEMICAL is expected to generate 1.91 times less return on investment than Stryker. In addition to that, WESTLAKE CHEMICAL is 1.32 times more volatile than Stryker. It trades about 0.03 of its total potential returns per unit of risk. Stryker is currently generating about 0.08 per unit of volatility. If you would invest 22,209 in Stryker on August 25, 2024 and sell it today you would earn a total of 14,631 from holding Stryker or generate 65.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
WESTLAKE CHEMICAL vs. Stryker
Performance |
| Timeline |
| WESTLAKE CHEMICAL |
| Stryker |
WESTLAKE CHEMICAL and Stryker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WESTLAKE CHEMICAL and Stryker
The main advantage of trading using opposite WESTLAKE CHEMICAL and Stryker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WESTLAKE CHEMICAL position performs unexpectedly, Stryker 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 Stryker will offset losses from the drop in Stryker's long position.| WESTLAKE CHEMICAL vs. Apple Inc | WESTLAKE CHEMICAL vs. Apple Inc | WESTLAKE CHEMICAL vs. Apple Inc | WESTLAKE CHEMICAL vs. Apple Inc |
| Stryker vs. BlueScope Steel Limited | Stryker vs. Commercial Vehicle Group | Stryker vs. GFL ENVIRONM | Stryker vs. Cleanaway Waste Management |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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