Correlation Between Lotte Chemical and YX Precious
Can any of the company-specific risk be diversified away by investing in both Lotte Chemical and YX Precious 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 YX Precious 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 YX Precious Metals, you can compare the effects of market volatilities on Lotte Chemical and YX Precious 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 YX Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and YX Precious.
Diversification Opportunities for Lotte Chemical and YX Precious
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lotte and 0250 is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Titan and YX Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YX Precious Metals 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 YX Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YX Precious Metals has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and YX Precious go up and down completely randomly.
Pair Corralation between Lotte Chemical and YX Precious
Assuming the 90 days trading horizon Lotte Chemical Titan is expected to under-perform the YX Precious. In addition to that, Lotte Chemical is 2.71 times more volatile than YX Precious Metals. It trades about -0.06 of its total potential returns per unit of risk. YX Precious Metals is currently generating about 0.01 per unit of volatility. If you would invest 24.00 in YX Precious Metals on October 16, 2024 and sell it today you would earn a total of 0.00 from holding YX Precious Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chemical Titan vs. YX Precious Metals
Performance |
| Timeline |
| Lotte Chemical Titan |
| YX Precious Metals |
Lotte Chemical and YX Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chemical and YX Precious
The main advantage of trading using opposite Lotte Chemical and YX Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, YX Precious 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 YX Precious will offset losses from the drop in YX Precious' long position.| Lotte Chemical vs. Petronas Chemicals Group | Lotte Chemical vs. Ancom Berhad | Lotte Chemical vs. Techbond Group Bhd |
| YX Precious vs. Star Media Group | YX Precious vs. Senheng New Retail | YX Precious vs. Tex Cycle Technology | YX Precious vs. PESTECH International 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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