Correlation Between Lotte Chemical and K One
Can any of the company-specific risk be diversified away by investing in both Lotte Chemical and K One 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 Lotte Chemical and K One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Chemical Titan and K One Technology Bhd, you can compare the effects of market volatilities on Lotte Chemical and K One 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 Lotte Chemical with a short position of K One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and K One.
Diversification Opportunities for Lotte Chemical and K One
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and 0111 is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Titan and K One Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K One Technology and Lotte Chemical 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 Lotte Chemical Titan are associated (or correlated) with K One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K One Technology has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and K One go up and down completely randomly.
Pair Corralation between Lotte Chemical and K One
Assuming the 90 days trading horizon Lotte Chemical Titan is expected to generate 0.51 times more return on investment than K One. However, Lotte Chemical Titan is 1.95 times less risky than K One. It trades about -0.3 of its potential returns per unit of risk. K One Technology Bhd is currently generating about -0.38 per unit of risk. If you would invest 64.00 in Lotte Chemical Titan on November 5, 2024 and sell it today you would lose (7.00) from holding Lotte Chemical Titan or give up 10.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Lotte Chemical Titan vs. K One Technology Bhd
Performance |
| Timeline |
| Lotte Chemical Titan |
| K One Technology |
Lotte Chemical and K One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chemical and K One
The main advantage of trading using opposite Lotte Chemical and K One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, K One 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 K One will offset losses from the drop in K One's long position.| Lotte Chemical vs. Petronas Chemicals Group | Lotte Chemical vs. Techbond Group Bhd | Lotte Chemical vs. Digistar Bhd | Lotte Chemical vs. Tambun Indah Land |
| K One vs. Uchi Technologies Bhd | K One vs. Digistar Bhd | K One vs. Minetech Resources Bhd | K One vs. OpenSys M 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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