Correlation Between YTL Hospitality and Lotte Chemical
Can any of the company-specific risk be diversified away by investing in both YTL Hospitality 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 YTL Hospitality and Lotte Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YTL Hospitality REIT and Lotte Chemical Titan, you can compare the effects of market volatilities on YTL Hospitality 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 YTL Hospitality with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of YTL Hospitality and Lotte Chemical.
Diversification Opportunities for YTL Hospitality and Lotte Chemical
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between YTL and Lotte is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding YTL Hospitality REIT 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 YTL Hospitality 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 YTL Hospitality REIT 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 YTL Hospitality i.e., YTL Hospitality and Lotte Chemical go up and down completely randomly.
Pair Corralation between YTL Hospitality and Lotte Chemical
Assuming the 90 days trading horizon YTL Hospitality REIT is expected to generate 0.29 times more return on investment than Lotte Chemical. However, YTL Hospitality REIT is 3.48 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 -0.47 per unit of risk. If you would invest 120.00 in YTL Hospitality REIT on August 30, 2024 and sell it today you would earn a total of 0.00 from holding YTL Hospitality REIT or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
YTL Hospitality REIT vs. Lotte Chemical Titan
Performance |
| Timeline |
| YTL Hospitality REIT |
| Lotte Chemical Titan |
YTL Hospitality and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YTL Hospitality and Lotte Chemical
The main advantage of trading using opposite YTL Hospitality and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YTL Hospitality 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.| YTL Hospitality vs. Shangri La Hotels | YTL Hospitality vs. Impiana Hotels Bhd | YTL Hospitality vs. Sports Toto Berhad | YTL Hospitality vs. Choo Bee Metal |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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