Correlation Between HK Metals and Lotte Chemical
Can any of the company-specific risk be diversified away by investing in both HK Metals and Lotte Chemical 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 HK Metals and Lotte Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HK Metals Utama and Lotte Chemical Titan, you can compare the effects of market volatilities on HK Metals 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 HK Metals with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Metals and Lotte Chemical.
Diversification Opportunities for HK Metals and Lotte Chemical
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HKMU and Lotte is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HK Metals Utama and Lotte Chemical Titan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chemical Titan and HK Metals 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 HK Metals Utama 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 Titan has no effect on the direction of HK Metals i.e., HK Metals and Lotte Chemical go up and down completely randomly.
Pair Corralation between HK Metals and Lotte Chemical
If you would invest 16,700 in Lotte Chemical Titan on September 3, 2024 and sell it today you would earn a total of 2,100 from holding Lotte Chemical Titan or generate 12.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
HK Metals Utama vs. Lotte Chemical Titan
Performance |
| Timeline |
| HK Metals Utama |
| Lotte Chemical Titan |
HK Metals and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Metals and Lotte Chemical
The main advantage of trading using opposite HK Metals and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Metals 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.| HK Metals vs. PT Indonesia Kendaraan | HK Metals vs. Wijaya Karya Bangunan | HK Metals vs. Buyung Poetra Sembada | HK Metals vs. J Resources Asia |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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