Correlation Between Lotte Chemical and Ittehad Chemicals
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By analyzing existing cross correlation between Lotte Chemical Pakistan and Ittehad Chemicals, you can compare the effects of market volatilities on Lotte Chemical and Ittehad Chemicals 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 Ittehad Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and Ittehad Chemicals.
Diversification Opportunities for Lotte Chemical and Ittehad Chemicals
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotte and Ittehad is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Pakistan and Ittehad Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ittehad Chemicals 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 Ittehad Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ittehad Chemicals has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and Ittehad Chemicals go up and down completely randomly.
Pair Corralation between Lotte Chemical and Ittehad Chemicals
Assuming the 90 days trading horizon Lotte Chemical Pakistan is expected to generate 1.77 times more return on investment than Ittehad Chemicals. However, Lotte Chemical is 1.77 times more volatile than Ittehad Chemicals. It trades about 0.24 of its potential returns per unit of risk. Ittehad Chemicals is currently generating about 0.31 per unit of risk. If you would invest 1,674 in Lotte Chemical Pakistan on August 27, 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chemical Pakistan vs. Ittehad Chemicals
Performance |
| Timeline |
| Lotte Chemical Pakistan |
| Ittehad Chemicals |
Lotte Chemical and Ittehad Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chemical and Ittehad Chemicals
The main advantage of trading using opposite Lotte Chemical and Ittehad Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, Ittehad Chemicals 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 Ittehad Chemicals will offset losses from the drop in Ittehad Chemicals' long position.| Lotte Chemical vs. Masood Textile Mills | Lotte Chemical vs. Fauji Foods | Lotte Chemical vs. KSB Pumps | Lotte Chemical vs. Mari Petroleum |
| Ittehad Chemicals vs. Masood Textile Mills | Ittehad Chemicals vs. Fauji Foods | Ittehad Chemicals vs. KSB Pumps | Ittehad Chemicals vs. Mari Petroleum |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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