Correlation Between Westlake Chemical and AdvanSix
Can any of the company-specific risk be diversified away by investing in both Westlake Chemical and AdvanSix 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 AdvanSix 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 AdvanSix, you can compare the effects of market volatilities on Westlake Chemical and AdvanSix 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 AdvanSix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westlake Chemical and AdvanSix.
Diversification Opportunities for Westlake Chemical and AdvanSix
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Westlake and AdvanSix is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Westlake Chemical Partners and AdvanSix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvanSix 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 AdvanSix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvanSix has no effect on the direction of Westlake Chemical i.e., Westlake Chemical and AdvanSix go up and down completely randomly.
Pair Corralation between Westlake Chemical and AdvanSix
Given the investment horizon of 90 days Westlake Chemical Partners is expected to under-perform the AdvanSix. But the stock apears to be less risky and, when comparing its historical volatility, Westlake Chemical Partners is 2.24 times less risky than AdvanSix. The stock trades about -0.07 of its potential returns per unit of risk. The AdvanSix is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,468 in AdvanSix on March 9, 2025 and sell it today you would lose (81.00) from holding AdvanSix or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westlake Chemical Partners vs. AdvanSix
Performance |
| Timeline |
| Westlake Chemical |
| AdvanSix |
Westlake Chemical and AdvanSix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westlake Chemical and AdvanSix
The main advantage of trading using opposite Westlake Chemical and AdvanSix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westlake Chemical position performs unexpectedly, AdvanSix 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 AdvanSix will offset losses from the drop in AdvanSix's long position.| Westlake Chemical vs. Valhi Inc | Westlake Chemical vs. Huntsman | Westlake Chemical vs. Lsb Industries | Westlake Chemical vs. Green Plains Renewable |
| AdvanSix vs. Methanex | AdvanSix vs. Lsb Industries | AdvanSix vs. Green Plains Renewable | AdvanSix vs. Tronox Holdings PLC |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |