Correlation Between Everplay Group and Westlake Chemical

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

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

Diversification Opportunities for Everplay Group and Westlake Chemical

-0.12

Correlation Coefficient

Everplay Group  Westlake Chemical

Good diversification

The 3 months correlation between Everplay and Westlake is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Everplay Group PLC and Westlake Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westlake Chemical Corp and Everplay Group 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 Everplay Group PLC are associated (or correlated) with Westlake Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westlake Chemical Corp has no effect on the direction of Everplay Group i.e., Everplay Group and Westlake Chemical go up and down completely randomly.

Pair Corralation between Everplay Group and Westlake Chemical

Assuming the 90 days trading horizon Everplay Group PLC is expected to generate 0.96 times more return on investment than Westlake Chemical. However, Everplay Group PLC is 1.04 times less risky than Westlake Chemical. It trades about 0.19 of its potential returns per unit of risk. Westlake Chemical Corp is currently generating about -0.01 per unit of risk. If you would invest  26,367  in Everplay Group PLC on April 25, 2025 and sell it today you would earn a total of  10,433  from holding Everplay Group PLC or generate 39.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Everplay Group PLC  vs.  Westlake Chemical Corp

Everplay Group PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Everplay Group PLC are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Everplay Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 comparatively stable basic indicators, Westlake Chemical is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Everplay Group and Westlake Chemical

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

The idea behind Everplay Group PLC and Westlake Chemical Corp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..