Correlation Between Lotte Chemical and Century Insurance
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By analyzing existing cross correlation between Lotte Chemical Pakistan and Century Insurance, you can compare the effects of market volatilities on Lotte Chemical and Century Insurance 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 Century Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and Century Insurance.
Diversification Opportunities for Lotte Chemical and Century Insurance
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotte and Century is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Pakistan and Century Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Insurance 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 Century Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Insurance has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and Century Insurance go up and down completely randomly.
Pair Corralation between Lotte Chemical and Century Insurance
Assuming the 90 days trading horizon Lotte Chemical Pakistan is expected to generate 3.13 times more return on investment than Century Insurance. However, Lotte Chemical is 3.13 times more volatile than Century Insurance. It trades about 0.03 of its potential returns per unit of risk. Century Insurance is currently generating about 0.08 per unit of risk. If you would invest 2,125 in Lotte Chemical Pakistan on November 4, 2024 and sell it today you would earn a total of 26.00 from holding Lotte Chemical Pakistan or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Lotte Chemical Pakistan vs. Century Insurance
Performance |
| Timeline |
| Lotte Chemical Pakistan |
| Century Insurance |
Lotte Chemical and Century Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chemical and Century Insurance
The main advantage of trading using opposite Lotte Chemical and Century Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, Century Insurance 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 Century Insurance will offset losses from the drop in Century Insurance's long position.| Lotte Chemical vs. Oil and Gas | Lotte Chemical vs. Unilever Pakistan Foods | Lotte Chemical vs. Askari General Insurance | Lotte Chemical vs. Ittehad Chemicals |
| Century Insurance vs. East West Insurance | Century Insurance vs. Reliance Insurance Co | Century Insurance vs. Fauji Foods | Century Insurance vs. Ghandhara Automobile |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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