Correlation Between Sardar Chemical and Lotte Chemical
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By analyzing existing cross correlation between Sardar Chemical Industries and Lotte Chemical Pakistan, you can compare the effects of market volatilities on Sardar Chemical 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 Sardar Chemical with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sardar Chemical and Lotte Chemical.
Diversification Opportunities for Sardar Chemical and Lotte Chemical
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sardar and Lotte is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sardar Chemical Industries 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 Sardar 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 Sardar Chemical Industries 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 Sardar Chemical i.e., Sardar Chemical and Lotte Chemical go up and down completely randomly.
Pair Corralation between Sardar Chemical and Lotte Chemical
Assuming the 90 days trading horizon Sardar Chemical Industries is expected to generate 2.16 times more return on investment than Lotte Chemical. However, Sardar Chemical is 2.16 times more volatile than Lotte Chemical Pakistan. It trades about 0.02 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 3,493 in Sardar Chemical Industries on August 27, 2024 and sell it today you would lose (193.00) from holding Sardar Chemical Industries or give up 5.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 52.61% |
| Values | Daily Returns |
Sardar Chemical Industries vs. Lotte Chemical Pakistan
Performance |
| Timeline |
| Sardar Chemical Indu |
| Lotte Chemical Pakistan |
Sardar Chemical and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sardar Chemical and Lotte Chemical
The main advantage of trading using opposite Sardar Chemical and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sardar Chemical 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.| Sardar Chemical vs. Habib Insurance | Sardar Chemical vs. Century Insurance | Sardar Chemical vs. Reliance Weaving Mills | Sardar Chemical vs. Media Times |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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