Correlation Between LyondellBasell Industries and SIKA AG
Can any of the company-specific risk be diversified away by investing in both LyondellBasell Industries and SIKA AG 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 LyondellBasell Industries and SIKA AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LyondellBasell Industries NV and SIKA AG UNSPADR, you can compare the effects of market volatilities on LyondellBasell Industries and SIKA AG 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 LyondellBasell Industries with a short position of SIKA AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of LyondellBasell Industries and SIKA AG.
Diversification Opportunities for LyondellBasell Industries and SIKA AG
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LyondellBasell and SIKA is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding LyondellBasell Industries NV and SIKA AG UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIKA AG UNSPADR and LyondellBasell Industries 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 LyondellBasell Industries NV are associated (or correlated) with SIKA AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIKA AG UNSPADR has no effect on the direction of LyondellBasell Industries i.e., LyondellBasell Industries and SIKA AG go up and down completely randomly.
Pair Corralation between LyondellBasell Industries and SIKA AG
Assuming the 90 days horizon LyondellBasell Industries NV is expected to under-perform the SIKA AG. But the stock apears to be less risky and, when comparing its historical volatility, LyondellBasell Industries NV is 1.14 times less risky than SIKA AG. The stock trades about -0.06 of its potential returns per unit of risk. The SIKA AG UNSPADR is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,680 in SIKA AG UNSPADR on November 7, 2024 and sell it today you would lose (320.00) from holding SIKA AG UNSPADR or give up 11.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LyondellBasell Industries NV vs. SIKA AG UNSPADR
Performance |
| Timeline |
| LyondellBasell Industries |
| SIKA AG UNSPADR |
LyondellBasell Industries and SIKA AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LyondellBasell Industries and SIKA AG
The main advantage of trading using opposite LyondellBasell Industries and SIKA AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LyondellBasell Industries position performs unexpectedly, SIKA AG 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 SIKA AG will offset losses from the drop in SIKA AG's long position.| LyondellBasell Industries vs. InterContinental Hotels Group | LyondellBasell Industries vs. Harmony Gold Mining | LyondellBasell Industries vs. HYATT HOTELS A | LyondellBasell Industries vs. GALENA MINING LTD |
| SIKA AG vs. BII Railway Transportation | SIKA AG vs. PLAYMATES TOYS | SIKA AG vs. PARKEN Sport Entertainment | SIKA AG vs. Yuexiu Transport Infrastructure |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |