Correlation Between Lotte Chemical and Avanceon
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By analyzing existing cross correlation between Lotte Chemical Pakistan and Avanceon, you can compare the effects of market volatilities on Lotte Chemical and Avanceon 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 Avanceon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chemical and Avanceon.
Diversification Opportunities for Lotte Chemical and Avanceon
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lotte and Avanceon is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chemical Pakistan and Avanceon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avanceon 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 Pakistan are associated (or correlated) with Avanceon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avanceon has no effect on the direction of Lotte Chemical i.e., Lotte Chemical and Avanceon go up and down completely randomly.
Pair Corralation between Lotte Chemical and Avanceon
Assuming the 90 days trading horizon Lotte Chemical Pakistan is expected to generate 1.2 times more return on investment than Avanceon. However, Lotte Chemical is 1.2 times more volatile than Avanceon. It trades about 0.13 of its potential returns per unit of risk. Avanceon is currently generating about 0.04 per unit of risk. If you would invest 1,652 in Lotte Chemical Pakistan on September 10, 2024 and sell it today you would earn a total of 317.00 from holding Lotte Chemical Pakistan or generate 19.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lotte Chemical Pakistan vs. Avanceon
Performance |
Timeline |
Lotte Chemical Pakistan |
Avanceon |
Lotte Chemical and Avanceon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lotte Chemical and Avanceon
The main advantage of trading using opposite Lotte Chemical and Avanceon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chemical position performs unexpectedly, Avanceon 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 Avanceon will offset losses from the drop in Avanceon's long position.Lotte Chemical vs. EFU General Insurance | Lotte Chemical vs. Murree Brewery | Lotte Chemical vs. Sindh Modaraba Management | Lotte Chemical vs. Bank of Punjab |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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