Correlation Between Lotte Chemical and Beco Steel
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By analyzing existing cross correlation between Lotte Chemical Pakistan and Beco Steel, you can compare the effects of market volatilities on Lotte Chemical and Beco Steel 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 Beco Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and Beco Steel.
Diversification Opportunities for Lotte Chemical and Beco Steel
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Beco is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Pakistan and Beco Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beco Steel 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 Beco Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beco Steel has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and Beco Steel go up and down completely randomly.
Pair Corralation between Lotte Chemical and Beco Steel
Assuming the 90 days trading horizon Lotte Chemical Pakistan is expected to generate 1.79 times more return on investment than Beco Steel. However, Lotte Chemical is 1.79 times more volatile than Beco Steel. It trades about 0.13 of its potential returns per unit of risk. Beco Steel is currently generating about 0.0 per unit of risk. If you would invest 1,734 in Lotte Chemical Pakistan on September 2, 2024 and sell it today you would earn a total of 164.00 from holding Lotte Chemical Pakistan or generate 9.46% 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. Beco Steel
Performance |
| Timeline |
| Lotte Chemical Pakistan |
| Beco Steel |
Lotte Chemical and Beco Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chemical and Beco Steel
The main advantage of trading using opposite Lotte Chemical and Beco Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, Beco Steel 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 Beco Steel will offset losses from the drop in Beco Steel's long position.| Lotte Chemical vs. Masood Textile Mills | Lotte Chemical vs. Fauji Foods | Lotte Chemical vs. KSB Pumps | Lotte Chemical vs. Mari Petroleum |
| Beco Steel vs. Habib Insurance | Beco Steel vs. Century Insurance | Beco Steel vs. Reliance Weaving Mills | Beco Steel vs. Media Times |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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