Correlation Between Grays Leasing and Lotte Chemical
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By analyzing existing cross correlation between Grays Leasing and Lotte Chemical Pakistan, you can compare the effects of market volatilities on Grays Leasing and Lotte 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 Grays Leasing with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grays Leasing and Lotte Chemical.
Diversification Opportunities for Grays Leasing and Lotte Chemical
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grays and Lotte is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Grays Leasing and Lotte Chemical Pakistan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chemical Pakistan and Grays Leasing 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 Grays Leasing are associated (or correlated) with Lotte Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chemical Pakistan has no effect on the direction of Grays Leasing i.e., Grays Leasing and Lotte Chemical go up and down completely randomly.
Pair Corralation between Grays Leasing and Lotte Chemical
Assuming the 90 days trading horizon Grays Leasing is expected to generate 4.43 times less return on investment than Lotte Chemical. In addition to that, Grays Leasing is 1.2 times more volatile than Lotte Chemical Pakistan. It trades about 0.03 of its total potential returns per unit of risk. Lotte Chemical Pakistan is currently generating about 0.16 per unit of volatility. If you would invest 1,683 in Lotte Chemical Pakistan on August 30, 2024 and sell it today you would earn a total of 202.00 from holding Lotte Chemical Pakistan or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Grays Leasing vs. Lotte Chemical Pakistan
Performance |
| Timeline |
| Grays Leasing |
| Lotte Chemical Pakistan |
Grays Leasing and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grays Leasing and Lotte Chemical
The main advantage of trading using opposite Grays Leasing and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grays Leasing position performs unexpectedly, Lotte 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 Lotte Chemical will offset losses from the drop in Lotte Chemical's long position.| Grays Leasing vs. East West Insurance | Grays Leasing vs. Century Insurance | Grays Leasing vs. Shifa International Hospitals | Grays Leasing vs. Air Link Communication |
| Lotte Chemical vs. Masood Textile Mills | Lotte Chemical vs. Fauji Foods | Lotte Chemical vs. KSB Pumps | Lotte Chemical vs. Mari Petroleum |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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