Correlation Between Lotte Chemical and Ghani Chemical
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By analyzing existing cross correlation between Lotte Chemical Pakistan and Ghani Chemical Industries, you can compare the effects of market volatilities on Lotte Chemical and Ghani 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 Lotte Chemical with a short position of Ghani Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and Ghani Chemical.
Diversification Opportunities for Lotte Chemical and Ghani Chemical
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotte and Ghani is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Pakistan and Ghani Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ghani Chemical Industries 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 Ghani Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ghani Chemical Industries has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and Ghani Chemical go up and down completely randomly.
Pair Corralation between Lotte Chemical and Ghani Chemical
Assuming the 90 days trading horizon Lotte Chemical is expected to generate 2.72 times less return on investment than Ghani Chemical. But when comparing it to its historical volatility, Lotte Chemical Pakistan is 1.48 times less risky than Ghani Chemical. It trades about 0.17 of its potential returns per unit of risk. Ghani Chemical Industries is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,082 in Ghani Chemical Industries on August 26, 2024 and sell it today you would earn a total of 341.00 from holding Ghani Chemical Industries or generate 31.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chemical Pakistan vs. Ghani Chemical Industries
Performance |
| Timeline |
| Lotte Chemical Pakistan |
| Ghani Chemical Industries |
Lotte Chemical and Ghani Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chemical and Ghani Chemical
The main advantage of trading using opposite Lotte Chemical and Ghani Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, Ghani 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 Ghani Chemical will offset losses from the drop in Ghani Chemical's long position.| Lotte Chemical vs. JS Global Banking | Lotte Chemical vs. Matco Foods | Lotte Chemical vs. Soneri Bank | Lotte Chemical vs. The Organic Meat |
| Ghani Chemical vs. Adamjee Insurance | Ghani Chemical vs. Atlas Insurance | Ghani Chemical vs. Soneri Bank | Ghani Chemical vs. IBL HealthCare |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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