Correlation Between Lotte Non and SH Energy
Can any of the company-specific risk be diversified away by investing in both Lotte Non and SH Energy 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 SH Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Non Life Insurance and SH Energy Chemical, you can compare the effects of market volatilities on Lotte Non and SH Energy 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 SH Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and SH Energy.
Diversification Opportunities for Lotte Non and SH Energy
Good diversification
The 3 months correlation between Lotte and 002360 is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and SH Energy Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SH Energy Chemical 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 Insurance are associated (or correlated) with SH Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SH Energy Chemical has no effect on the direction of Lotte Non i.e., Lotte Non and SH Energy go up and down completely randomly.
Pair Corralation between Lotte Non and SH Energy
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to under-perform the SH Energy. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Non Life Insurance is 1.35 times less risky than SH Energy. The stock trades about -0.18 of its potential returns per unit of risk. The SH Energy Chemical is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 50,900 in SH Energy Chemical on September 1, 2024 and sell it today you would earn a total of 1,800 from holding SH Energy Chemical or generate 3.54% 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 Insurance vs. SH Energy Chemical
Performance |
| Timeline |
| Lotte Non Life |
| SH Energy Chemical |
Lotte Non and SH Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and SH Energy
The main advantage of trading using opposite Lotte Non and SH Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, SH Energy 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 SH Energy will offset losses from the drop in SH Energy's long position.| Lotte Non vs. AptaBio Therapeutics | Lotte Non vs. Daewoo SBI SPAC | Lotte Non vs. Dream Security co | Lotte Non vs. Microfriend |
| SH Energy vs. Air Busan Co | SH Energy vs. Jeju Air Co | SH Energy vs. Cube Entertainment | SH Energy vs. MEDIANA CoLtd |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |