Correlation Between Westlake Chemical and Sibanye Gold
Can any of the company-specific risk be diversified away by investing in both Westlake Chemical and Sibanye Gold 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 Sibanye Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westlake Chemical Partners and Sibanye Gold Ltd, you can compare the effects of market volatilities on Westlake Chemical and Sibanye Gold 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 Sibanye Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westlake Chemical and Sibanye Gold.
Diversification Opportunities for Westlake Chemical and Sibanye Gold
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Westlake and Sibanye is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Westlake Chemical Partners and Sibanye Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sibanye Gold 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 Partners are associated (or correlated) with Sibanye Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sibanye Gold has no effect on the direction of Westlake Chemical i.e., Westlake Chemical and Sibanye Gold go up and down completely randomly.
Pair Corralation between Westlake Chemical and Sibanye Gold
Given the investment horizon of 90 days Westlake Chemical Partners is expected to generate 0.23 times more return on investment than Sibanye Gold. However, Westlake Chemical Partners is 4.44 times less risky than Sibanye Gold. It trades about 0.08 of its potential returns per unit of risk. Sibanye Gold Ltd is currently generating about 0.0 per unit of risk. If you would invest 2,112 in Westlake Chemical Partners on November 9, 2024 and sell it today you would earn a total of 378.00 from holding Westlake Chemical Partners or generate 17.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westlake Chemical Partners vs. Sibanye Gold Ltd
Performance |
| Timeline |
| Westlake Chemical |
| Sibanye Gold |
Westlake Chemical and Sibanye Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westlake Chemical and Sibanye Gold
The main advantage of trading using opposite Westlake Chemical and Sibanye Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westlake Chemical position performs unexpectedly, Sibanye Gold 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 Sibanye Gold will offset losses from the drop in Sibanye Gold's long position.| Westlake Chemical vs. Valhi Inc | Westlake Chemical vs. Huntsman | Westlake Chemical vs. Lsb Industries | Westlake Chemical vs. Green Plains Renewable |
| Sibanye Gold vs. AngloGold Ashanti plc | Sibanye Gold vs. Harmony Gold Mining | Sibanye Gold vs. Eldorado Gold Corp | Sibanye Gold vs. Kinross Gold |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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