Correlation Between Lotte Non-Life and Wysiwyg Studios
Can any of the company-specific risk be diversified away by investing in both Lotte Non-Life and Wysiwyg Studios 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-Life and Wysiwyg Studios 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 Wysiwyg Studios Co, you can compare the effects of market volatilities on Lotte Non-Life and Wysiwyg Studios 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-Life with a short position of Wysiwyg Studios. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non-Life and Wysiwyg Studios.
Diversification Opportunities for Lotte Non-Life and Wysiwyg Studios
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Wysiwyg is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life and Wysiwyg Studios Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wysiwyg Studios and Lotte Non-Life 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 Wysiwyg Studios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wysiwyg Studios has no effect on the direction of Lotte Non-Life i.e., Lotte Non-Life and Wysiwyg Studios go up and down completely randomly.
Pair Corralation between Lotte Non-Life and Wysiwyg Studios
Assuming the 90 days trading horizon Lotte Non Life is expected to generate 0.85 times more return on investment than Wysiwyg Studios. However, Lotte Non Life is 1.17 times less risky than Wysiwyg Studios. It trades about 0.0 of its potential returns per unit of risk. Wysiwyg Studios Co is currently generating about -0.06 per unit of risk. If you would invest 224,500 in Lotte Non Life on September 12, 2024 and sell it today you would lose (29,800) from holding Lotte Non Life or give up 13.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life vs. Wysiwyg Studios Co
Performance |
| Timeline |
| Lotte Non Life |
| Wysiwyg Studios |
Lotte Non-Life and Wysiwyg Studios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non-Life and Wysiwyg Studios
The main advantage of trading using opposite Lotte Non-Life and Wysiwyg Studios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non-Life position performs unexpectedly, Wysiwyg Studios 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 Wysiwyg Studios will offset losses from the drop in Wysiwyg Studios' long position.| Lotte Non-Life vs. Dongnam Chemical Co | Lotte Non-Life vs. Youl Chon Chemical | Lotte Non-Life vs. Kukdong Oil Chemicals | Lotte Non-Life vs. Sempio Foods Co |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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