Correlation Between Lotte Non and RaemongRaein
Can any of the company-specific risk be diversified away by investing in both Lotte Non and RaemongRaein 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 RaemongRaein 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 RaemongRaein Co, you can compare the effects of market volatilities on Lotte Non and RaemongRaein 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 RaemongRaein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and RaemongRaein.
Diversification Opportunities for Lotte Non and RaemongRaein
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lotte and RaemongRaein is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life and RaemongRaein Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RaemongRaein 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 RaemongRaein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RaemongRaein has no effect on the direction of Lotte Non i.e., Lotte Non and RaemongRaein go up and down completely randomly.
Pair Corralation between Lotte Non and RaemongRaein
Assuming the 90 days trading horizon Lotte Non Life is expected to under-perform the RaemongRaein. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Non Life is 1.88 times less risky than RaemongRaein. The stock trades about -0.18 of its potential returns per unit of risk. The RaemongRaein Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,899,000 in RaemongRaein Co on September 5, 2024 and sell it today you would lose (141,000) from holding RaemongRaein Co or give up 7.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lotte Non Life vs. RaemongRaein Co
Performance |
| Timeline |
| Lotte Non Life |
| RaemongRaein |
Lotte Non and RaemongRaein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and RaemongRaein
The main advantage of trading using opposite Lotte Non and RaemongRaein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, RaemongRaein 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 RaemongRaein will offset losses from the drop in RaemongRaein's long position.| Lotte Non vs. Daejoo Electronic Materials | Lotte Non vs. Derkwoo Electronics Co | Lotte Non vs. NH Investment Securities | Lotte Non vs. Visang Education |
| RaemongRaein vs. Ssangyong Materials Corp | RaemongRaein vs. RF Materials Co | RaemongRaein vs. TOPMATERIAL LTD | RaemongRaein vs. Hyosung Advanced 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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