Correlation Between Public Packages and Lotte Chemical
Can any of the company-specific risk be diversified away by investing in both Public Packages 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 Public Packages and Lotte Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Packages Holdings and Lotte Chemical Titan, you can compare the effects of market volatilities on Public Packages 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 Public Packages with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Packages and Lotte Chemical.
Diversification Opportunities for Public Packages and Lotte Chemical
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Public and Lotte is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Public Packages Holdings 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 Public Packages 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 Public Packages Holdings 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 Public Packages i.e., Public Packages and Lotte Chemical go up and down completely randomly.
Pair Corralation between Public Packages and Lotte Chemical
Assuming the 90 days trading horizon Public Packages Holdings is expected to generate 0.66 times more return on investment than Lotte Chemical. However, Public Packages Holdings is 1.51 times less risky than Lotte Chemical. It trades about 0.01 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 79.00 in Public Packages Holdings on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Public Packages Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Packages Holdings vs. Lotte Chemical Titan
Performance |
| Timeline |
| Public Packages Holdings |
| Lotte Chemical Titan |
Public Packages and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Packages and Lotte Chemical
The main advantage of trading using opposite Public Packages and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Packages 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.| Public Packages vs. Malayan Banking Bhd | Public Packages vs. Public Bank Bhd | Public Packages vs. Petronas Chemicals Group | Public Packages vs. Tenaga Nasional Bhd |
| Lotte Chemical vs. Digistar Bhd | Lotte Chemical vs. Minetech Resources Bhd | Lotte Chemical vs. OpenSys M Bhd | Lotte Chemical vs. Insas 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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