Correlation Between Lotte Non and Samyang Foods
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Samyang Foods 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 Samyang Foods 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 Samyang Foods Co, you can compare the effects of market volatilities on Lotte Non and Samyang Foods 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 Samyang Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Samyang Foods.
Diversification Opportunities for Lotte Non and Samyang Foods
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lotte and Samyang is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and Samyang Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyang Foods 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 Samyang Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samyang Foods has no effect on the direction of Lotte Non i.e., Lotte Non and Samyang Foods go up and down completely randomly.
Pair Corralation between Lotte Non and Samyang Foods
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to under-perform the Samyang Foods. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Non Life Insurance is 2.13 times less risky than Samyang Foods. The stock trades about -0.25 of its potential returns per unit of risk. The Samyang Foods Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 74,845,900 in Samyang Foods Co on December 11, 2024 and sell it today you would earn a total of 14,854,100 from holding Samyang Foods Co or generate 19.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life Insurance vs. Samyang Foods Co
Performance |
| Timeline |
| Lotte Non Life |
| Samyang Foods |
Lotte Non and Samyang Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Samyang Foods
The main advantage of trading using opposite Lotte Non and Samyang Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Samyang Foods 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 Samyang Foods will offset losses from the drop in Samyang Foods' long position.| Lotte Non vs. Dong A Steel Technology | Lotte Non vs. PLAYWITH | Lotte Non vs. Seers Technology | Lotte Non vs. Eugene Technology CoLtd |
| Samyang Foods vs. Woori Technology | Samyang Foods vs. Union Materials Corp | Samyang Foods vs. WONIK Materials CoLtd | Samyang Foods vs. Orbitech 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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