Correlation Between Lotte Chemical and Siloam International
Can any of the company-specific risk be diversified away by investing in both Lotte Chemical and Siloam International 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 Siloam International 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 Siloam International Hospitals, you can compare the effects of market volatilities on Lotte Chemical and Siloam International 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 Siloam International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and Siloam International.
Diversification Opportunities for Lotte Chemical and Siloam International
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lotte and Siloam is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Titan and Siloam International Hospitals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siloam International 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 Siloam International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siloam International has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and Siloam International go up and down completely randomly.
Pair Corralation between Lotte Chemical and Siloam International
Assuming the 90 days trading horizon Lotte Chemical Titan is expected to under-perform the Siloam International. In addition to that, Lotte Chemical is 1.37 times more volatile than Siloam International Hospitals. It trades about -0.11 of its total potential returns per unit of risk. Siloam International Hospitals is currently generating about -0.11 per unit of volatility. If you would invest 311,000 in Siloam International Hospitals on November 5, 2024 and sell it today you would lose (7,000) from holding Siloam International Hospitals or give up 2.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chemical Titan vs. Siloam International Hospitals
Performance |
| Timeline |
| Lotte Chemical Titan |
| Siloam International |
Lotte Chemical and Siloam International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chemical and Siloam International
The main advantage of trading using opposite Lotte Chemical and Siloam International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, Siloam International 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 Siloam International will offset losses from the drop in Siloam International'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 |
| Siloam International vs. Mitra Keluarga Karyasehat | Siloam International vs. Matahari Department Store | Siloam International vs. Surya Citra Media | Siloam International vs. Sawit Sumbermas Sarana |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |