Correlation Between Lotte Chemical and Humpuss Intermoda
Can any of the company-specific risk be diversified away by investing in both Lotte Chemical and Humpuss Intermoda 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 Humpuss Intermoda 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 Humpuss Intermoda Transportasi, you can compare the effects of market volatilities on Lotte Chemical and Humpuss Intermoda 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 Humpuss Intermoda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and Humpuss Intermoda.
Diversification Opportunities for Lotte Chemical and Humpuss Intermoda
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lotte and Humpuss is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Titan and Humpuss Intermoda Transportasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humpuss Intermoda 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 Humpuss Intermoda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humpuss Intermoda has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and Humpuss Intermoda go up and down completely randomly.
Pair Corralation between Lotte Chemical and Humpuss Intermoda
Assuming the 90 days trading horizon Lotte Chemical Titan is expected to generate 0.41 times more return on investment than Humpuss Intermoda. However, Lotte Chemical Titan is 2.44 times less risky than Humpuss Intermoda. It trades about -0.04 of its potential returns per unit of risk. Humpuss Intermoda Transportasi is currently generating about -0.18 per unit of risk. If you would invest 19,000 in Lotte Chemical Titan on October 23, 2024 and sell it today you would lose (200.00) from holding Lotte Chemical Titan or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chemical Titan vs. Humpuss Intermoda Transportasi
Performance |
| Timeline |
| Lotte Chemical Titan |
| Humpuss Intermoda |
Lotte Chemical and Humpuss Intermoda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chemical and Humpuss Intermoda
The main advantage of trading using opposite Lotte Chemical and Humpuss Intermoda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, Humpuss Intermoda 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 Humpuss Intermoda will offset losses from the drop in Humpuss Intermoda'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 |
| Humpuss Intermoda vs. PT MNC Energy | Humpuss Intermoda vs. Tanah Laut Tbk | Humpuss Intermoda vs. Indorama Synthetics Tbk | Humpuss Intermoda vs. Fortune Mate Indonesia |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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