Correlation Between Synthetic Products and Lotte Chemical
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By analyzing existing cross correlation between Synthetic Products Enterprises and Lotte Chemical Pakistan, you can compare the effects of market volatilities on Synthetic Products 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 Synthetic Products with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synthetic Products and Lotte Chemical.
Diversification Opportunities for Synthetic Products and Lotte Chemical
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Synthetic and Lotte is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Synthetic Products Enterprises 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 Synthetic Products 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 Synthetic Products Enterprises 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 Synthetic Products i.e., Synthetic Products and Lotte Chemical go up and down completely randomly.
Pair Corralation between Synthetic Products and Lotte Chemical
Assuming the 90 days trading horizon Synthetic Products Enterprises is expected to under-perform the Lotte Chemical. In addition to that, Synthetic Products is 1.79 times more volatile than Lotte Chemical Pakistan. It trades about -0.02 of its total potential returns per unit of risk. Lotte Chemical Pakistan is currently generating about 0.27 per unit of volatility. If you would invest 1,906 in Lotte Chemical Pakistan on October 20, 2024 and sell it today you would earn a total of 228.00 from holding Lotte Chemical Pakistan or generate 11.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synthetic Products Enterprises vs. Lotte Chemical Pakistan
Performance |
| Timeline |
| Synthetic Products |
| Lotte Chemical Pakistan |
Synthetic Products and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synthetic Products and Lotte Chemical
The main advantage of trading using opposite Synthetic Products and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synthetic Products 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.| Synthetic Products vs. Masood Textile Mills | Synthetic Products vs. Fauji Foods | Synthetic Products vs. KSB Pumps | Synthetic Products vs. Mari Petroleum |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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