Correlation Between LyondellBasell Industries and Soken Chemical
Can any of the company-specific risk be diversified away by investing in both LyondellBasell Industries and Soken 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 LyondellBasell Industries and Soken Chemical 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 Soken Chemical Engineering, you can compare the effects of market volatilities on LyondellBasell Industries and Soken 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 LyondellBasell Industries with a short position of Soken Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of LyondellBasell Industries and Soken Chemical.
Diversification Opportunities for LyondellBasell Industries and Soken Chemical
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LyondellBasell and Soken is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LyondellBasell Industries NV and Soken Chemical Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soken Chemical Engin 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 Soken Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soken Chemical Engin has no effect on the direction of LyondellBasell Industries i.e., LyondellBasell Industries and Soken Chemical go up and down completely randomly.
Pair Corralation between LyondellBasell Industries and Soken Chemical
If you would invest 1,266 in Soken Chemical Engineering on October 10, 2024 and sell it today you would earn a total of 0.00 from holding Soken Chemical Engineering or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LyondellBasell Industries NV vs. Soken Chemical Engineering
Performance |
| Timeline |
| LyondellBasell Industries |
| Soken Chemical Engin |
LyondellBasell Industries and Soken Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LyondellBasell Industries and Soken Chemical
The main advantage of trading using opposite LyondellBasell Industries and Soken Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LyondellBasell Industries position performs unexpectedly, Soken 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 Soken Chemical will offset losses from the drop in Soken Chemical's long position.| LyondellBasell Industries vs. Air Liquide SA | LyondellBasell Industries vs. Dupont De Nemours | LyondellBasell Industries vs. PPG Industries |
| Soken Chemical vs. betterU Education Corp | Soken Chemical vs. Nexstar Media Group | Soken Chemical vs. American Public Education | Soken Chemical vs. CHINA EDUCATION GROUP |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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