Correlation Between Lotte Chemical and Aneka Tambang
Can any of the company-specific risk be diversified away by investing in both Lotte Chemical and Aneka Tambang at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lotte Chemical and Aneka Tambang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Chemical Titan and Aneka Tambang Persero, you can compare the effects of market volatilities on Lotte Chemical and Aneka Tambang 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 Lotte Chemical with a short position of Aneka Tambang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and Aneka Tambang.
Diversification Opportunities for Lotte Chemical and Aneka Tambang
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lotte and Aneka is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Titan and Aneka Tambang Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aneka Tambang Persero and Lotte 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 Lotte Chemical Titan are associated (or correlated) with Aneka Tambang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aneka Tambang Persero has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and Aneka Tambang go up and down completely randomly.
Pair Corralation between Lotte Chemical and Aneka Tambang
Assuming the 90 days trading horizon Lotte Chemical Titan is expected to under-perform the Aneka Tambang. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Chemical Titan is 1.64 times less risky than Aneka Tambang. The stock trades about 0.0 of its potential returns per unit of risk. The Aneka Tambang Persero is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 142,500 in Aneka Tambang Persero on September 26, 2024 and sell it today you would earn a total of 1,000.00 from holding Aneka Tambang Persero or generate 0.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lotte Chemical Titan vs. Aneka Tambang Persero
Performance |
Timeline |
Lotte Chemical Titan |
Aneka Tambang Persero |
Lotte Chemical and Aneka Tambang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lotte Chemical and Aneka Tambang
The main advantage of trading using opposite Lotte Chemical and Aneka Tambang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, Aneka Tambang 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 Aneka Tambang will offset losses from the drop in Aneka Tambang's long position.Lotte Chemical vs. Intanwijaya Internasional Tbk | Lotte Chemical vs. Asiaplast Industries Tbk | Lotte Chemical vs. Trias Sentosa Tbk |
Aneka Tambang vs. Intanwijaya Internasional Tbk | Aneka Tambang vs. Asiaplast Industries Tbk | Aneka Tambang vs. Trias Sentosa Tbk | Aneka Tambang vs. Lotte Chemical Titan |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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