Correlation Between Lotte Non-Life and Carriesoft
Can any of the company-specific risk be diversified away by investing in both Lotte Non-Life and Carriesoft 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 Carriesoft 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 Carriesoft Co, you can compare the effects of market volatilities on Lotte Non-Life and Carriesoft 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 Carriesoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non-Life and Carriesoft.
Diversification Opportunities for Lotte Non-Life and Carriesoft
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Carriesoft is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life and Carriesoft Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carriesoft 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 Carriesoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carriesoft has no effect on the direction of Lotte Non-Life i.e., Lotte Non-Life and Carriesoft go up and down completely randomly.
Pair Corralation between Lotte Non-Life and Carriesoft
Assuming the 90 days trading horizon Lotte Non Life is expected to generate 1.26 times more return on investment than Carriesoft. However, Lotte Non-Life is 1.26 times more volatile than Carriesoft Co. It trades about 0.03 of its potential returns per unit of risk. Carriesoft Co is currently generating about -0.02 per unit of risk. If you would invest 171,100 in Lotte Non Life on September 12, 2024 and sell it today you would earn a total of 23,600 from holding Lotte Non Life or generate 13.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life vs. Carriesoft Co
Performance |
| Timeline |
| Lotte Non Life |
| Carriesoft |
Lotte Non-Life and Carriesoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non-Life and Carriesoft
The main advantage of trading using opposite Lotte Non-Life and Carriesoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non-Life position performs unexpectedly, Carriesoft 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 Carriesoft will offset losses from the drop in Carriesoft's 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 |
| Carriesoft vs. HYBE Co | Carriesoft vs. GiantStep Co | Carriesoft vs. NH SPAC 8 | Carriesoft vs. Wysiwyg Studios Co |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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