Correlation Between Shaheen Insurance and Lotte Chemical
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By analyzing existing cross correlation between Shaheen Insurance and Lotte Chemical Pakistan, you can compare the effects of market volatilities on Shaheen Insurance 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 Shaheen Insurance with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaheen Insurance and Lotte Chemical.
Diversification Opportunities for Shaheen Insurance and Lotte Chemical
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shaheen and Lotte is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shaheen Insurance 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 Shaheen Insurance 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 Shaheen Insurance 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 Shaheen Insurance i.e., Shaheen Insurance and Lotte Chemical go up and down completely randomly.
Pair Corralation between Shaheen Insurance and Lotte Chemical
Assuming the 90 days trading horizon Shaheen Insurance is expected to generate 0.77 times more return on investment than Lotte Chemical. However, Shaheen Insurance is 1.29 times less risky than Lotte Chemical. It trades about 0.33 of its potential returns per unit of risk. Lotte Chemical Pakistan is currently generating about 0.24 per unit of risk. If you would invest 475.00 in Shaheen Insurance on August 28, 2024 and sell it today you would earn a total of 85.00 from holding Shaheen Insurance or generate 17.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaheen Insurance vs. Lotte Chemical Pakistan
Performance |
| Timeline |
| Shaheen Insurance |
| Lotte Chemical Pakistan |
Shaheen Insurance and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaheen Insurance and Lotte Chemical
The main advantage of trading using opposite Shaheen Insurance and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaheen Insurance 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.| Shaheen Insurance vs. Pakistan Telecommunication | Shaheen Insurance vs. International Steels | Shaheen Insurance vs. 786 Investment Limited | Shaheen Insurance vs. Beco Steel |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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