Correlation Between Lotte Chemical and Ciptadana Asset
Can any of the company-specific risk be diversified away by investing in both Lotte Chemical and Ciptadana Asset 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 Ciptadana Asset 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 Ciptadana Asset Management, you can compare the effects of market volatilities on Lotte Chemical and Ciptadana Asset 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 Ciptadana Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and Ciptadana Asset.
Diversification Opportunities for Lotte Chemical and Ciptadana Asset
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Ciptadana is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Titan and Ciptadana Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ciptadana Asset Mana 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 Ciptadana Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ciptadana Asset Mana has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and Ciptadana Asset go up and down completely randomly.
Pair Corralation between Lotte Chemical and Ciptadana Asset
Assuming the 90 days trading horizon Lotte Chemical is expected to generate 1.1 times less return on investment than Ciptadana Asset. But when comparing it to its historical volatility, Lotte Chemical Titan is 2.03 times less risky than Ciptadana Asset. It trades about 0.0 of its potential returns per unit of risk. Ciptadana Asset Management is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 8,391 in Ciptadana Asset Management on August 27, 2024 and sell it today you would lose (2,591) from holding Ciptadana Asset Management or give up 30.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.95% |
| Values | Daily Returns |
Lotte Chemical Titan vs. Ciptadana Asset Management
Performance |
| Timeline |
| Lotte Chemical Titan |
| Ciptadana Asset Mana |
Lotte Chemical and Ciptadana Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chemical and Ciptadana Asset
The main advantage of trading using opposite Lotte Chemical and Ciptadana Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, Ciptadana Asset 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 Ciptadana Asset will offset losses from the drop in Ciptadana Asset's long position.| Lotte Chemical vs. Kedaung Indah Can | Lotte Chemical vs. Langgeng Makmur Industri | Lotte Chemical vs. Kabelindo Murni Tbk | Lotte Chemical vs. Mustika Ratu Tbk |
| Ciptadana Asset vs. Ashmore Asset Management | Ciptadana Asset vs. Victoria Insurance Tbk | Ciptadana Asset vs. Gunawan Dianjaya Steel | Ciptadana Asset vs. Humpuss Intermoda Transportasi |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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