Correlation Between Westlake Chemical and Jewett Cameron

Can any of the company-specific risk be diversified away by investing in both Westlake Chemical and Jewett Cameron 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 Jewett Cameron 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 Jewett Cameron Trading, you can compare the effects of market volatilities on Westlake Chemical and Jewett Cameron 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 Jewett Cameron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westlake Chemical and Jewett Cameron.

Diversification Opportunities for Westlake Chemical and Jewett Cameron

-0.4

Correlation Coefficient

Westlake Chemical  Jewett Cameron

Very good diversification

The 3 months correlation between Westlake and Jewett is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Westlake Chemical Partners and Jewett Cameron Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jewett Cameron Trading 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 Jewett Cameron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jewett Cameron Trading has no effect on the direction of Westlake Chemical i.e., Westlake Chemical and Jewett Cameron go up and down completely randomly.

Pair Corralation between Westlake Chemical and Jewett Cameron

Given the investment horizon of 90 days Westlake Chemical Partners is expected to generate 0.26 times more return on investment than Jewett Cameron. However, Westlake Chemical Partners is 3.92 times less risky than Jewett Cameron. It trades about 0.18 of its potential returns per unit of risk. Jewett Cameron Trading is currently generating about -0.02 per unit of risk. If you would invest  2,226  in Westlake Chemical Partners on September 2, 2024 and sell it today you would earn a total of  151.00  from holding Westlake Chemical Partners or generate 6.78% 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.  Jewett Cameron Trading

Westlake Chemical

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Westlake Chemical Partners are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent forward-looking signals, Westlake Chemical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Jewett Cameron Trading

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jewett Cameron Trading has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Jewett Cameron is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Westlake Chemical and Jewett Cameron

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

The idea behind Westlake Chemical Partners and Jewett Cameron Trading 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.