Correlation Between Media Prima and Lotte Chemical
Can any of the company-specific risk be diversified away by investing in both Media Prima 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 Media Prima and Lotte Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media Prima Bhd and Lotte Chemical Titan, you can compare the effects of market volatilities on Media Prima 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 Media Prima with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media Prima and Lotte Chemical.
Diversification Opportunities for Media Prima and Lotte Chemical
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Media and Lotte is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Media Prima 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 Media Prima 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 Media Prima 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 Media Prima i.e., Media Prima and Lotte Chemical go up and down completely randomly.
Pair Corralation between Media Prima and Lotte Chemical
Assuming the 90 days trading horizon Media Prima Bhd is expected to generate 0.28 times more return on investment than Lotte Chemical. However, Media Prima Bhd is 3.56 times less risky than Lotte Chemical. It trades about 0.0 of its potential returns per unit of risk. Lotte Chemical Titan is currently generating about -0.49 per unit of risk. If you would invest 47.00 in Media Prima Bhd on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Media Prima 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 |
Media Prima Bhd vs. Lotte Chemical Titan
Performance |
| Timeline |
| Media Prima Bhd |
| Lotte Chemical Titan |
Media Prima and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media Prima and Lotte Chemical
The main advantage of trading using opposite Media Prima and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media Prima 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.| Media Prima vs. Diversified Gateway Solutions | Media Prima vs. Supercomnet Technologies Bhd | Media Prima vs. ONETECH SOLUTIONS HOLDINGS | Media Prima vs. Uchi Technologies 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |