Correlation Between Lotte Non and Wintec
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Wintec 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 Wintec 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 Wintec Co, you can compare the effects of market volatilities on Lotte Non and Wintec 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 Wintec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Wintec.
Diversification Opportunities for Lotte Non and Wintec
Excellent diversification
The 3 months correlation between Lotte and Wintec is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life and Wintec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintec 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 Wintec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintec has no effect on the direction of Lotte Non i.e., Lotte Non and Wintec go up and down completely randomly.
Pair Corralation between Lotte Non and Wintec
Assuming the 90 days trading horizon Lotte Non Life is expected to under-perform the Wintec. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Non Life is 1.58 times less risky than Wintec. The stock trades about -0.19 of its potential returns per unit of risk. The Wintec Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 275,500 in Wintec Co on September 3, 2024 and sell it today you would earn a total of 6,500 from holding Wintec Co or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life vs. Wintec Co
Performance |
| Timeline |
| Lotte Non Life |
| Wintec |
Lotte Non and Wintec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Wintec
The main advantage of trading using opposite Lotte Non and Wintec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Wintec 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 Wintec will offset losses from the drop in Wintec's long position.| Lotte Non vs. Dongjin Semichem Co | Lotte Non vs. AhnLab Inc | Lotte Non vs. Posco ICT | Lotte Non vs. CJ ENM |
| Wintec vs. Sempio Foods Co | Wintec vs. Playgram Co | Wintec vs. Lotte Data Communication | Wintec vs. Haitai Confectionery Foods |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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