Correlation Between Pakistan State and Lotte Chemical
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By analyzing existing cross correlation between Pakistan State Oil and Lotte Chemical Pakistan, you can compare the effects of market volatilities on Pakistan State 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 Pakistan State with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pakistan State and Lotte Chemical.
Diversification Opportunities for Pakistan State and Lotte Chemical
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pakistan and Lotte is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pakistan State Oil 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 Pakistan State 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 Pakistan State Oil 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 Pakistan State i.e., Pakistan State and Lotte Chemical go up and down completely randomly.
Pair Corralation between Pakistan State and Lotte Chemical
Assuming the 90 days trading horizon Pakistan State Oil is expected to generate 1.06 times more return on investment than Lotte Chemical. However, Pakistan State is 1.06 times more volatile than Lotte Chemical Pakistan. It trades about 0.08 of its potential returns per unit of risk. Lotte Chemical Pakistan is currently generating about 0.01 per unit of risk. If you would invest 13,205 in Pakistan State Oil on August 28, 2024 and sell it today you would earn a total of 14,180 from holding Pakistan State Oil or generate 107.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pakistan State Oil vs. Lotte Chemical Pakistan
Performance |
| Timeline |
| Pakistan State Oil |
| Lotte Chemical Pakistan |
Pakistan State and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pakistan State and Lotte Chemical
The main advantage of trading using opposite Pakistan State and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pakistan State 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.| Pakistan State vs. Soneri Bank | Pakistan State vs. Synthetic Products Enterprises | Pakistan State vs. Bank of Punjab | Pakistan State vs. Sardar Chemical Industries |
| Lotte Chemical vs. Masood Textile Mills | Lotte Chemical vs. Fauji Foods | Lotte Chemical vs. KSB Pumps | Lotte Chemical 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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