Correlation Between Lotte Chemical and Al Shaheer
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By analyzing existing cross correlation between Lotte Chemical Pakistan and Al Shaheer, you can compare the effects of market volatilities on Lotte Chemical and Al Shaheer 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 Al Shaheer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and Al Shaheer.
Diversification Opportunities for Lotte Chemical and Al Shaheer
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lotte and ASC is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Pakistan and Al Shaheer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Shaheer 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 Al Shaheer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Shaheer has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and Al Shaheer go up and down completely randomly.
Pair Corralation between Lotte Chemical and Al Shaheer
Assuming the 90 days trading horizon Lotte Chemical is expected to generate 1.61 times less return on investment than Al Shaheer. But when comparing it to its historical volatility, Lotte Chemical Pakistan is 1.25 times less risky than Al Shaheer. It trades about 0.31 of its potential returns per unit of risk. Al Shaheer is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 540.00 in Al Shaheer on September 13, 2024 and sell it today you would earn a total of 300.00 from holding Al Shaheer or generate 55.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lotte Chemical Pakistan vs. Al Shaheer
Performance |
| Timeline |
| Lotte Chemical Pakistan |
| Al Shaheer |
Lotte Chemical and Al Shaheer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chemical and Al Shaheer
The main advantage of trading using opposite Lotte Chemical and Al Shaheer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, Al Shaheer 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 Al Shaheer will offset losses from the drop in Al Shaheer's long position.| Lotte Chemical vs. Orient Rental Modaraba | Lotte Chemical vs. Metropolitan Steel Corp | Lotte Chemical vs. Pakistan Synthetics | Lotte Chemical vs. Grays Leasing |
| Al Shaheer vs. Security Investment Bank | Al Shaheer vs. Hi Tech Lubricants | Al Shaheer vs. Beco Steel | Al Shaheer vs. NetSol Technologies |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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