Correlation Between Lotte Chemical and Mahaka Media
Can any of the company-specific risk be diversified away by investing in both Lotte Chemical and Mahaka Media 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 Mahaka Media 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 Mahaka Media Tbk, you can compare the effects of market volatilities on Lotte Chemical and Mahaka Media 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 Mahaka Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and Mahaka Media.
Diversification Opportunities for Lotte Chemical and Mahaka Media
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lotte and Mahaka is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Titan and Mahaka Media Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mahaka Media Tbk 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 Mahaka Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mahaka Media Tbk has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and Mahaka Media go up and down completely randomly.
Pair Corralation between Lotte Chemical and Mahaka Media
Assuming the 90 days trading horizon Lotte Chemical Titan is expected to under-perform the Mahaka Media. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Chemical Titan is 1.06 times less risky than Mahaka Media. The stock trades about -0.04 of its potential returns per unit of risk. The Mahaka Media Tbk is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 2,500 in Mahaka Media Tbk on October 23, 2024 and sell it today you would earn a total of 300.00 from holding Mahaka Media Tbk or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chemical Titan vs. Mahaka Media Tbk
Performance |
| Timeline |
| Lotte Chemical Titan |
| Mahaka Media Tbk |
Lotte Chemical and Mahaka Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chemical and Mahaka Media
The main advantage of trading using opposite Lotte Chemical and Mahaka Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, Mahaka Media 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 Mahaka Media will offset losses from the drop in Mahaka Media's long position.| Lotte Chemical vs. Champion Pacific Indonesia | Lotte Chemical vs. Argha Karya Prima | Lotte Chemical vs. Asiaplast Industries Tbk | Lotte Chemical vs. Intanwijaya Internasional Tbk |
| Mahaka Media vs. Akbar Indomakmur Stimec | Mahaka Media vs. Bayu Buana Tbk | Mahaka Media vs. Centratama Telekomunikasi Ind | Mahaka Media vs. Fortune Indonesia Tbk |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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