Correlation Between TAS Offshore and Lotte Chemical
Can any of the company-specific risk be diversified away by investing in both TAS Offshore 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 TAS Offshore and Lotte Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAS Offshore Bhd and Lotte Chemical Titan, you can compare the effects of market volatilities on TAS Offshore 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 TAS Offshore with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAS Offshore and Lotte Chemical.
Diversification Opportunities for TAS Offshore and Lotte Chemical
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TAS and Lotte is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding TAS Offshore 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 TAS Offshore 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 TAS Offshore 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 TAS Offshore i.e., TAS Offshore and Lotte Chemical go up and down completely randomly.
Pair Corralation between TAS Offshore and Lotte Chemical
Assuming the 90 days trading horizon TAS Offshore Bhd is expected to generate 0.65 times more return on investment than Lotte Chemical. However, TAS Offshore Bhd is 1.54 times less risky than Lotte Chemical. It trades about 0.2 of its potential returns per unit of risk. Lotte Chemical Titan is currently generating about -0.13 per unit of risk. If you would invest 64.00 in TAS Offshore Bhd on October 26, 2024 and sell it today you would earn a total of 4.00 from holding TAS Offshore Bhd or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TAS Offshore Bhd vs. Lotte Chemical Titan
Performance |
| Timeline |
| TAS Offshore Bhd |
| Lotte Chemical Titan |
TAS Offshore and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAS Offshore and Lotte Chemical
The main advantage of trading using opposite TAS Offshore and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAS Offshore 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.| TAS Offshore vs. Lysaght Galvanized Steel | TAS Offshore vs. Star Media Group | TAS Offshore vs. CSC Steel Holdings | TAS Offshore vs. Sungei Bagan Rubber |
| Lotte Chemical vs. Apex Healthcare Bhd | Lotte Chemical vs. TAS Offshore Bhd | Lotte Chemical vs. YX Precious Metals | Lotte Chemical vs. Computer Forms 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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