Correlation Between WESTLAKE CHEMICAL and Cross Country
Can any of the company-specific risk be diversified away by investing in both WESTLAKE CHEMICAL and Cross Country 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 Cross Country into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WESTLAKE CHEMICAL and Cross Country Healthcare, you can compare the effects of market volatilities on WESTLAKE CHEMICAL and Cross Country 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 Cross Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of WESTLAKE CHEMICAL and Cross Country.
Diversification Opportunities for WESTLAKE CHEMICAL and Cross Country
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WESTLAKE and Cross is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding WESTLAKE CHEMICAL and Cross Country Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cross Country Healthcare 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 Cross Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cross Country Healthcare has no effect on the direction of WESTLAKE CHEMICAL i.e., WESTLAKE CHEMICAL and Cross Country go up and down completely randomly.
Pair Corralation between WESTLAKE CHEMICAL and Cross Country
Assuming the 90 days trading horizon WESTLAKE CHEMICAL is expected to under-perform the Cross Country. But the stock apears to be less risky and, when comparing its historical volatility, WESTLAKE CHEMICAL is 7.09 times less risky than Cross Country. The stock trades about -0.19 of its potential returns per unit of risk. The Cross Country Healthcare is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,120 in Cross Country Healthcare on September 12, 2024 and sell it today you would earn a total of 590.00 from holding Cross Country Healthcare or generate 52.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
WESTLAKE CHEMICAL vs. Cross Country Healthcare
Performance |
| Timeline |
| WESTLAKE CHEMICAL |
| Cross Country Healthcare |
WESTLAKE CHEMICAL and Cross Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WESTLAKE CHEMICAL and Cross Country
The main advantage of trading using opposite WESTLAKE CHEMICAL and Cross Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WESTLAKE CHEMICAL position performs unexpectedly, Cross Country 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 Cross Country will offset losses from the drop in Cross Country's long position.| WESTLAKE CHEMICAL vs. Apple Inc | WESTLAKE CHEMICAL vs. Apple Inc | WESTLAKE CHEMICAL vs. Apple Inc | WESTLAKE CHEMICAL vs. Apple Inc |
| Cross Country vs. Seven West Media | Cross Country vs. Universal Entertainment | Cross Country vs. TOWNSQUARE MEDIA INC | Cross Country vs. Goosehead Insurance |
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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