Correlation Between Westlake Chemical and Walmart

Can any of the company-specific risk be diversified away by investing in both Westlake Chemical and Walmart 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 Walmart into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Westlake Chemical Corp and Walmart, you can compare the effects of market volatilities on Westlake Chemical and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westlake Chemical and Walmart.

Diversification Opportunities for Westlake Chemical and Walmart

-0.69

Correlation Coefficient

Westlake Chemical  Walmart

Excellent diversification

The 3 months correlation between Westlake and Walmart is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Westlake Chemical Corp and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Corp are associated (or correlated) with Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Westlake Chemical i.e., Westlake Chemical and Walmart go up and down completely randomly.

Pair Corralation between Westlake Chemical and Walmart

Assuming the 90 days trading horizon Westlake Chemical Corp is expected to under-perform the Walmart. In addition to that, Westlake Chemical is 38.85 times more volatile than Walmart. It trades about -0.12 of its total potential returns per unit of risk. Walmart is currently generating about 0.13 per unit of volatility. If you would invest  5,939  in Walmart on December 2, 2024 and sell it today you would earn a total of  21.00  from holding Walmart or generate 0.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Westlake Chemical Corp  vs.  Walmart

Westlake Chemical Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Westlake Chemical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Walmart

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Walmart is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Westlake Chemical and Walmart

The main advantage of trading using opposite Westlake Chemical and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westlake Chemical position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.

The idea behind Westlake Chemical Corp and Walmart pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.