Correlation Between Flexible Solutions and LyondellBasell Industries
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions and LyondellBasell Industries 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 Flexible Solutions and LyondellBasell Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Solutions International and LyondellBasell Industries NV, you can compare the effects of market volatilities on Flexible Solutions and LyondellBasell Industries 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 Flexible Solutions with a short position of LyondellBasell Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and LyondellBasell Industries.
Diversification Opportunities for Flexible Solutions and LyondellBasell Industries
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flexible and LyondellBasell is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and LyondellBasell Industries NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LyondellBasell Industries and Flexible Solutions 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 Flexible Solutions International are associated (or correlated) with LyondellBasell Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LyondellBasell Industries has no effect on the direction of Flexible Solutions i.e., Flexible Solutions and LyondellBasell Industries go up and down completely randomly.
Pair Corralation between Flexible Solutions and LyondellBasell Industries
Considering the 90-day investment horizon Flexible Solutions International is expected to under-perform the LyondellBasell Industries. In addition to that, Flexible Solutions is 1.54 times more volatile than LyondellBasell Industries NV. It trades about -0.29 of its total potential returns per unit of risk. LyondellBasell Industries NV is currently generating about -0.43 per unit of volatility. If you would invest 8,252 in LyondellBasell Industries NV on September 23, 2024 and sell it today you would lose (902.00) from holding LyondellBasell Industries NV or give up 10.93% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Flexible Solutions Internation vs. LyondellBasell Industries NV
Performance |
Timeline |
Flexible Solutions |
LyondellBasell Industries |
Flexible Solutions and LyondellBasell Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Flexible Solutions and LyondellBasell Industries
The main advantage of trading using opposite Flexible Solutions and LyondellBasell Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions position performs unexpectedly, LyondellBasell Industries 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 LyondellBasell Industries will offset losses from the drop in LyondellBasell Industries' long position.Flexible Solutions vs. LyondellBasell Industries NV | Flexible Solutions vs. Cabot | Flexible Solutions vs. Westlake Chemical | Flexible Solutions vs. Air Products and |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |