Correlation Between Lotte Chemical and Sitara Chemical
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By analyzing existing cross correlation between Lotte Chemical Pakistan and Sitara Chemical Industries, you can compare the effects of market volatilities on Lotte Chemical and Sitara 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 Sitara Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and Sitara Chemical.
Diversification Opportunities for Lotte Chemical and Sitara Chemical
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotte and Sitara is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Pakistan and Sitara Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitara Chemical Indu 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 Sitara Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitara Chemical Indu has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and Sitara Chemical go up and down completely randomly.
Pair Corralation between Lotte Chemical and Sitara Chemical
Assuming the 90 days trading horizon Lotte Chemical Pakistan is expected to generate 1.16 times more return on investment than Sitara Chemical. However, Lotte Chemical is 1.16 times more volatile than Sitara Chemical Industries. It trades about 0.03 of its potential returns per unit of risk. Sitara Chemical Industries is currently generating about -0.02 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 | 90.91% |
| Values | Daily Returns |
Lotte Chemical Pakistan vs. Sitara Chemical Industries
Performance |
| Timeline |
| Lotte Chemical Pakistan |
| Sitara Chemical Indu |
Lotte Chemical and Sitara Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chemical and Sitara Chemical
The main advantage of trading using opposite Lotte Chemical and Sitara Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, Sitara 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 Sitara Chemical will offset losses from the drop in Sitara Chemical'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 |
| Sitara Chemical vs. Pakistan Tobacco | Sitara Chemical vs. Data Agro | Sitara Chemical vs. Century Insurance | Sitara Chemical vs. Oil and Gas |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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