Correlation Between Lotte Chemical and Chinyang Hold
Can any of the company-specific risk be diversified away by investing in both Lotte Chemical and Chinyang Hold 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 Lotte Chemical and Chinyang Hold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Chemical Corp and Chinyang Hold, you can compare the effects of market volatilities on Lotte Chemical and Chinyang Hold 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 Lotte Chemical with a short position of Chinyang Hold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and Chinyang Hold.
Diversification Opportunities for Lotte Chemical and Chinyang Hold
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lotte and Chinyang is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Corp and Chinyang Hold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinyang Hold and Lotte 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 Lotte Chemical Corp are associated (or correlated) with Chinyang Hold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinyang Hold has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and Chinyang Hold go up and down completely randomly.
Pair Corralation between Lotte Chemical and Chinyang Hold
Assuming the 90 days trading horizon Lotte Chemical Corp is expected to under-perform the Chinyang Hold. In addition to that, Lotte Chemical is 10.27 times more volatile than Chinyang Hold. It trades about -0.2 of its total potential returns per unit of risk. Chinyang Hold is currently generating about -0.29 per unit of volatility. If you would invest 318,500 in Chinyang Hold on September 12, 2024 and sell it today you would lose (9,500) from holding Chinyang Hold or give up 2.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chemical Corp vs. Chinyang Hold
Performance |
| Timeline |
| Lotte Chemical Corp |
| Chinyang Hold |
Lotte Chemical and Chinyang Hold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chemical and Chinyang Hold
The main advantage of trading using opposite Lotte Chemical and Chinyang Hold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, Chinyang Hold 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 Chinyang Hold will offset losses from the drop in Chinyang Hold's long position.| Lotte Chemical vs. LG Chemicals | Lotte Chemical vs. POSCO Holdings | Lotte Chemical vs. Hanwha Solutions | Lotte Chemical vs. Hyundai Steel |
| Chinyang Hold vs. LG Chemicals | Chinyang Hold vs. POSCO Holdings | Chinyang Hold vs. Hanwha Solutions | Chinyang Hold vs. Lotte Chemical Corp |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |