Correlation Between Mari Petroleum and Lotte Chemical
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By analyzing existing cross correlation between Mari Petroleum and Lotte Chemical Pakistan, you can compare the effects of market volatilities on Mari Petroleum and Lotte 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 Mari Petroleum with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mari Petroleum and Lotte Chemical.
Diversification Opportunities for Mari Petroleum and Lotte Chemical
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mari and Lotte is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mari Petroleum and Lotte Chemical Pakistan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chemical Pakistan and Mari Petroleum 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 Mari Petroleum are associated (or correlated) with Lotte Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chemical Pakistan has no effect on the direction of Mari Petroleum i.e., Mari Petroleum and Lotte Chemical go up and down completely randomly.
Pair Corralation between Mari Petroleum and Lotte Chemical
Assuming the 90 days trading horizon Mari Petroleum is expected to under-perform the Lotte Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Mari Petroleum is 1.3 times less risky than Lotte Chemical. The stock trades about -0.19 of its potential returns per unit of risk. The Lotte Chemical Pakistan is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,056 in Lotte Chemical Pakistan on October 24, 2024 and sell it today you would earn a total of 187.00 from holding Lotte Chemical Pakistan or generate 9.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mari Petroleum vs. Lotte Chemical Pakistan
Performance |
| Timeline |
| Mari Petroleum |
| Lotte Chemical Pakistan |
Mari Petroleum and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mari Petroleum and Lotte Chemical
The main advantage of trading using opposite Mari Petroleum and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mari Petroleum position performs unexpectedly, Lotte 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 Lotte Chemical will offset losses from the drop in Lotte Chemical's long position.| Mari Petroleum vs. JS Investments | Mari Petroleum vs. Premier Insurance | Mari Petroleum vs. IGI Life Insurance | Mari Petroleum vs. ITTEFAQ Iron Industries |
| Lotte Chemical vs. Universal Insurance | Lotte Chemical vs. EFU General Insurance | Lotte Chemical vs. Ghandhara Automobile | Lotte Chemical vs. JS Global Banking |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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