Correlation Between Lotte Chemical and Security Investment
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By analyzing existing cross correlation between Lotte Chemical Pakistan and Security Investment Bank, you can compare the effects of market volatilities on Lotte Chemical and Security Investment 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 Security Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and Security Investment.
Diversification Opportunities for Lotte Chemical and Security Investment
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lotte and Security is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Pakistan and Security Investment Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Investment Bank 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 Security Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Investment Bank has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and Security Investment go up and down completely randomly.
Pair Corralation between Lotte Chemical and Security Investment
Assuming the 90 days trading horizon Lotte Chemical Pakistan is expected to under-perform the Security Investment. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Chemical Pakistan is 2.83 times less risky than Security Investment. The stock trades about 0.0 of its potential returns per unit of risk. The Security Investment Bank is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 385.00 in Security Investment Bank on September 14, 2024 and sell it today you would earn a total of 112.00 from holding Security Investment Bank or generate 29.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 76.76% |
| Values | Daily Returns |
Lotte Chemical Pakistan vs. Security Investment Bank
Performance |
| Timeline |
| Lotte Chemical Pakistan |
| Security Investment Bank |
Lotte Chemical and Security Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chemical and Security Investment
The main advantage of trading using opposite Lotte Chemical and Security Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, Security Investment 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 Security Investment will offset losses from the drop in Security Investment's long position.| Lotte Chemical vs. Masood Textile Mills | Lotte Chemical vs. Fauji Foods | Lotte Chemical vs. KSB Pumps | Lotte Chemical vs. Mari Petroleum |
| Security Investment vs. Pakistan Tobacco | Security Investment vs. MCB Investment Manag | Security Investment vs. Allied Bank | Security Investment vs. Pak Datacom |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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