Correlation Between LyondellBasell Industries and Minerals Technologies
Can any of the company-specific risk be diversified away by investing in both LyondellBasell Industries and Minerals Technologies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining LyondellBasell Industries and Minerals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LyondellBasell Industries NV and Minerals Technologies, you can compare the effects of market volatilities on LyondellBasell Industries and Minerals Technologies 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 LyondellBasell Industries with a short position of Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of LyondellBasell Industries and Minerals Technologies.
Diversification Opportunities for LyondellBasell Industries and Minerals Technologies
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LyondellBasell and Minerals is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding LyondellBasell Industries NV and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies and LyondellBasell Industries 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 LyondellBasell Industries NV are associated (or correlated) with Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of LyondellBasell Industries i.e., LyondellBasell Industries and Minerals Technologies go up and down completely randomly.
Pair Corralation between LyondellBasell Industries and Minerals Technologies
Considering the 90-day investment horizon LyondellBasell Industries NV is expected to under-perform the Minerals Technologies. But the stock apears to be less risky and, when comparing its historical volatility, LyondellBasell Industries NV is 1.46 times less risky than Minerals Technologies. The stock trades about -0.19 of its potential returns per unit of risk. The Minerals Technologies is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7,602 in Minerals Technologies on October 31, 2024 and sell it today you would earn a total of 63.00 from holding Minerals Technologies or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LyondellBasell Industries NV vs. Minerals Technologies
Performance |
| Timeline |
| LyondellBasell Industries |
| Minerals Technologies |
LyondellBasell Industries and Minerals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LyondellBasell Industries and Minerals Technologies
The main advantage of trading using opposite LyondellBasell Industries and Minerals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LyondellBasell Industries position performs unexpectedly, Minerals Technologies 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 Minerals Technologies will offset losses from the drop in Minerals Technologies' long position.| LyondellBasell Industries vs. International Flavors Fragrances | LyondellBasell Industries vs. Cabot | LyondellBasell Industries vs. Westlake Chemical | LyondellBasell Industries vs. Air Products and |
| Minerals Technologies vs. Quaker Chemical | Minerals Technologies vs. Innospec | Minerals Technologies vs. H B Fuller | Minerals Technologies vs. Cabot |
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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