Correlation Between Amyris and LyondellBasell Industries
Can any of the company-specific risk be diversified away by investing in both Amyris and LyondellBasell Industries 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 Amyris and LyondellBasell Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amyris Inc and LyondellBasell Industries NV, you can compare the effects of market volatilities on Amyris and LyondellBasell Industries 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 Amyris with a short position of LyondellBasell Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amyris and LyondellBasell Industries.
Diversification Opportunities for Amyris and LyondellBasell Industries
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amyris and LyondellBasell is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Amyris Inc and LyondellBasell Industries NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LyondellBasell Industries and Amyris 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 Amyris Inc are associated (or correlated) with LyondellBasell Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LyondellBasell Industries has no effect on the direction of Amyris i.e., Amyris and LyondellBasell Industries go up and down completely randomly.
Pair Corralation between Amyris and LyondellBasell Industries
If you would invest 101.00 in Amyris Inc on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Amyris Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Amyris Inc vs. LyondellBasell Industries NV
Performance |
| Timeline |
| Amyris Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| LyondellBasell Industries |
Amyris and LyondellBasell Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amyris and LyondellBasell Industries
The main advantage of trading using opposite Amyris and LyondellBasell Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amyris position performs unexpectedly, LyondellBasell Industries 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 LyondellBasell Industries will offset losses from the drop in LyondellBasell Industries' long position.The idea behind Amyris Inc and LyondellBasell Industries NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| LyondellBasell Industries vs. International Flavors Fragrances | LyondellBasell Industries vs. Cabot | LyondellBasell Industries vs. Westlake Chemical | LyondellBasell Industries vs. Air Products and |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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