Correlation Between Lotte Chemical and Rubberex M
Can any of the company-specific risk be diversified away by investing in both Lotte Chemical and Rubberex M 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 Rubberex M 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 Rubberex M, you can compare the effects of market volatilities on Lotte Chemical and Rubberex M 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 Rubberex M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and Rubberex M.
Diversification Opportunities for Lotte Chemical and Rubberex M
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lotte and Rubberex is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Titan and Rubberex M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubberex M 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 Rubberex M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubberex M has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and Rubberex M go up and down completely randomly.
Pair Corralation between Lotte Chemical and Rubberex M
Assuming the 90 days trading horizon Lotte Chemical Titan is expected to under-perform the Rubberex M. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Chemical Titan is 1.7 times less risky than Rubberex M. The stock trades about -0.27 of its potential returns per unit of risk. The Rubberex M is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Rubberex M on August 31, 2024 and sell it today you would lose (1.00) from holding Rubberex M or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chemical Titan vs. Rubberex M
Performance |
| Timeline |
| Lotte Chemical Titan |
| Rubberex M |
Lotte Chemical and Rubberex M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chemical and Rubberex M
The main advantage of trading using opposite Lotte Chemical and Rubberex M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, Rubberex M 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 Rubberex M will offset losses from the drop in Rubberex M's long position.| Lotte Chemical vs. Choo Bee Metal | Lotte Chemical vs. Melewar Industrial Group | Lotte Chemical vs. Daya Materials Bhd | Lotte Chemical vs. Public Packages Holdings |
| Rubberex M vs. Computer Forms Bhd | Rubberex M vs. Press Metal Bhd | Rubberex M vs. JF Technology BHD | Rubberex M vs. Binasat Communications 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stocks Directory Find actively traded stocks across global markets |