Correlation Between PLASTIC INDUSTRY and LOTTOTECH

Can any of the company-specific risk be diversified away by investing in both PLASTIC INDUSTRY and LOTTOTECH 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 PLASTIC INDUSTRY and LOTTOTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PLASTIC INDUSTRY LTD and LOTTOTECH LTD, you can compare the effects of market volatilities on PLASTIC INDUSTRY and LOTTOTECH 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 PLASTIC INDUSTRY with a short position of LOTTOTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLASTIC INDUSTRY and LOTTOTECH.

Diversification Opportunities for PLASTIC INDUSTRY and LOTTOTECH

-0.05

Correlation Coefficient

PLASTIC INDUSTRY  LOTTOTECH

Good diversification

The 3 months correlation between PLASTIC and LOTTOTECH is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding PLASTIC INDUSTRY LTD and LOTTOTECH LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOTTOTECH LTD and PLASTIC INDUSTRY 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 PLASTIC INDUSTRY LTD are associated (or correlated) with LOTTOTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOTTOTECH LTD has no effect on the direction of PLASTIC INDUSTRY i.e., PLASTIC INDUSTRY and LOTTOTECH go up and down completely randomly.

Pair Corralation between PLASTIC INDUSTRY and LOTTOTECH

Assuming the 90 days trading horizon PLASTIC INDUSTRY LTD is expected to generate 0.84 times more return on investment than LOTTOTECH. However, PLASTIC INDUSTRY LTD is 1.19 times less risky than LOTTOTECH. It trades about 0.14 of its potential returns per unit of risk. LOTTOTECH LTD is currently generating about 0.01 per unit of risk. If you would invest  3,700  in PLASTIC INDUSTRY LTD on September 17, 2024 and sell it today you would earn a total of  725.00  from holding PLASTIC INDUSTRY LTD or generate 19.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PLASTIC INDUSTRY LTD  vs.  LOTTOTECH LTD

PLASTIC INDUSTRY LTD

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PLASTIC INDUSTRY LTD are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, PLASTIC INDUSTRY displayed solid returns over the last few months and may actually be approaching a breakup point.

LOTTOTECH LTD

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LOTTOTECH LTD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, LOTTOTECH is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PLASTIC INDUSTRY and LOTTOTECH

The main advantage of trading using opposite PLASTIC INDUSTRY and LOTTOTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLASTIC INDUSTRY position performs unexpectedly, LOTTOTECH 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 LOTTOTECH will offset losses from the drop in LOTTOTECH's long position.

The idea behind PLASTIC INDUSTRY LTD and LOTTOTECH LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..