Correlation Between Insas Bhd and Lotte Chemical
Can any of the company-specific risk be diversified away by investing in both Insas Bhd 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 Insas Bhd and Lotte Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insas Bhd and Lotte Chemical Titan, you can compare the effects of market volatilities on Insas Bhd 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 Insas Bhd with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insas Bhd and Lotte Chemical.
Diversification Opportunities for Insas Bhd and Lotte Chemical
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Insas and Lotte is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Insas 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 Insas Bhd 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 Insas 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 Insas Bhd i.e., Insas Bhd and Lotte Chemical go up and down completely randomly.
Pair Corralation between Insas Bhd and Lotte Chemical
Assuming the 90 days trading horizon Insas Bhd is expected to generate 0.59 times more return on investment than Lotte Chemical. However, Insas Bhd is 1.68 times less risky than Lotte Chemical. It trades about -0.18 of its potential returns per unit of risk. Lotte Chemical Titan is currently generating about -0.46 per unit of risk. If you would invest 100.00 in Insas Bhd on August 30, 2024 and sell it today you would lose (6.00) from holding Insas Bhd or give up 6.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Insas Bhd vs. Lotte Chemical Titan
Performance |
| Timeline |
| Insas Bhd |
| Lotte Chemical Titan |
Insas Bhd and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insas Bhd and Lotte Chemical
The main advantage of trading using opposite Insas Bhd and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insas Bhd 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.| Insas Bhd vs. Leader Steel Holdings | Insas Bhd vs. Press Metal Bhd | Insas Bhd vs. Shangri La Hotels | Insas Bhd vs. Ho Hup Construction |
| Lotte Chemical vs. Binasat Communications Bhd | Lotte Chemical vs. K One Technology Bhd | Lotte Chemical vs. Computer Forms Bhd | Lotte Chemical vs. TAS Offshore 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| 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 | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |