Correlation Between Lotte Chemical and Air Link
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By analyzing existing cross correlation between Lotte Chemical Pakistan and Air Link Communication, you can compare the effects of market volatilities on Lotte Chemical and Air Link 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 Air Link. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and Air Link.
Diversification Opportunities for Lotte Chemical and Air Link
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lotte and Air is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Pakistan and Air Link Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Link Communication 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 Pakistan are associated (or correlated) with Air Link. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Link Communication has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and Air Link go up and down completely randomly.
Pair Corralation between Lotte Chemical and Air Link
Assuming the 90 days trading horizon Lotte Chemical Pakistan is expected to generate 1.26 times more return on investment than Air Link. However, Lotte Chemical is 1.26 times more volatile than Air Link Communication. It trades about 0.24 of its potential returns per unit of risk. Air Link Communication is currently generating about -0.02 per unit of risk. If you would invest 1,674 in Lotte Chemical Pakistan on August 28, 2024 and sell it today you would earn a total of 278.00 from holding Lotte Chemical Pakistan or generate 16.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chemical Pakistan vs. Air Link Communication
Performance |
| Timeline |
| Lotte Chemical Pakistan |
| Air Link Communication |
Lotte Chemical and Air Link Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chemical and Air Link
The main advantage of trading using opposite Lotte Chemical and Air Link positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, Air Link 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 Air Link will offset losses from the drop in Air Link's long position.| Lotte Chemical vs. Masood Textile Mills | Lotte Chemical vs. Fauji Foods | Lotte Chemical vs. KSB Pumps | Lotte Chemical vs. Mari Petroleum |
| Air Link vs. Data Agro | Air Link vs. Grays Leasing | Air Link vs. Habib Insurance | Air Link vs. Jubilee Life Insurance |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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