Correlation Between Binasat Communications and Lotte Chemical
Can any of the company-specific risk be diversified away by investing in both Binasat Communications and Lotte 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 Binasat Communications and Lotte Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binasat Communications Bhd and Lotte Chemical Titan, you can compare the effects of market volatilities on Binasat Communications and Lotte 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 Binasat Communications with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and Lotte Chemical.
Diversification Opportunities for Binasat Communications and Lotte Chemical
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Binasat and Lotte is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd and Lotte Chemical Titan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chemical Titan and Binasat Communications 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 Binasat Communications Bhd are associated (or correlated) with Lotte Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chemical Titan has no effect on the direction of Binasat Communications i.e., Binasat Communications and Lotte Chemical go up and down completely randomly.
Pair Corralation between Binasat Communications and Lotte Chemical
Assuming the 90 days trading horizon Binasat Communications Bhd is expected to generate 1.39 times more return on investment than Lotte Chemical. However, Binasat Communications is 1.39 times more volatile than Lotte Chemical Titan. It trades about 0.02 of its potential returns per unit of risk. Lotte Chemical Titan is currently generating about -0.47 per unit of risk. If you would invest 21.00 in Binasat Communications Bhd on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Binasat Communications Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binasat Communications Bhd vs. Lotte Chemical Titan
Performance |
| Timeline |
| Binasat Communications |
| Lotte Chemical Titan |
Binasat Communications and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binasat Communications and Lotte Chemical
The main advantage of trading using opposite Binasat Communications and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications position performs unexpectedly, Lotte 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 Lotte Chemical will offset losses from the drop in Lotte Chemical's long position.| Binasat Communications vs. Digistar Bhd | Binasat Communications vs. Minetech Resources Bhd | Binasat Communications vs. OpenSys M Bhd | Binasat Communications vs. Insas Bhd |
| Lotte Chemical vs. Digistar Bhd | Lotte Chemical vs. Minetech Resources Bhd | Lotte Chemical vs. OpenSys M Bhd | Lotte Chemical vs. Insas Bhd |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |