Correlation Between WESTLAKE and BRP
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By analyzing existing cross correlation between WESTLAKE CHEM P and BRP Inc, you can compare the effects of market volatilities on WESTLAKE and BRP 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 with a short position of BRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of WESTLAKE and BRP.
Diversification Opportunities for WESTLAKE and BRP
Very weak diversification
The 3 months correlation between WESTLAKE and BRP is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding WESTLAKE CHEM P and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc and WESTLAKE 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 CHEM P are associated (or correlated) with BRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRP Inc has no effect on the direction of WESTLAKE i.e., WESTLAKE and BRP go up and down completely randomly.
Pair Corralation between WESTLAKE and BRP
Assuming the 90 days trading horizon WESTLAKE CHEM P is expected to generate 0.24 times more return on investment than BRP. However, WESTLAKE CHEM P is 4.19 times less risky than BRP. It trades about 0.1 of its potential returns per unit of risk. BRP Inc is currently generating about -0.4 per unit of risk. If you would invest 8,770 in WESTLAKE CHEM P on November 27, 2024 and sell it today you would earn a total of 68.00 from holding WESTLAKE CHEM P or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 55.0% |
| Values | Daily Returns |
WESTLAKE CHEM P vs. BRP Inc
Performance |
| Timeline |
| WESTLAKE CHEM P |
| BRP Inc |
WESTLAKE and BRP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WESTLAKE and BRP
The main advantage of trading using opposite WESTLAKE and BRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WESTLAKE position performs unexpectedly, BRP 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 BRP will offset losses from the drop in BRP's long position.| WESTLAKE vs. Aldel Financial II | WESTLAKE vs. EastGroup Properties | WESTLAKE vs. Inflection Point Acquisition | WESTLAKE vs. BJs Restaurants |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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