Correlation Between Lotte Non and ATON
Can any of the company-specific risk be diversified away by investing in both Lotte Non and ATON 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 Non and ATON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Non Life and ATON Inc, you can compare the effects of market volatilities on Lotte Non and ATON 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 Non with a short position of ATON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and ATON.
Diversification Opportunities for Lotte Non and ATON
Pay attention - limited upside
The 3 months correlation between Lotte and ATON is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life and ATON Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATON Inc and Lotte Non 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 Non Life are associated (or correlated) with ATON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATON Inc has no effect on the direction of Lotte Non i.e., Lotte Non and ATON go up and down completely randomly.
Pair Corralation between Lotte Non and ATON
Assuming the 90 days trading horizon Lotte Non Life is expected to under-perform the ATON. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Non Life is 2.28 times less risky than ATON. The stock trades about -0.21 of its potential returns per unit of risk. The ATON Inc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 416,500 in ATON Inc on August 25, 2024 and sell it today you would earn a total of 107,500 from holding ATON Inc or generate 25.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life vs. ATON Inc
Performance |
| Timeline |
| Lotte Non Life |
| ATON Inc |
Lotte Non and ATON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and ATON
The main advantage of trading using opposite Lotte Non and ATON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, ATON 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 ATON will offset losses from the drop in ATON's long position.| Lotte Non vs. SBI Investment KOREA | Lotte Non vs. EBEST Investment Securities | Lotte Non vs. Jeju Air Co | Lotte Non vs. Daewoo Engineering Construction |
| ATON vs. Shinsegae Information Communication | ATON vs. Lotte Energy Materials | ATON vs. National Plastic Co | ATON vs. LS Materials |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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