Correlation Between Lotte Non and Samyoung Electronics
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Samyoung Electronics 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 Samyoung Electronics 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 Samyoung Electronics Co, you can compare the effects of market volatilities on Lotte Non and Samyoung Electronics 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 Samyoung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Samyoung Electronics.
Diversification Opportunities for Lotte Non and Samyoung Electronics
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Samyoung is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and Samyoung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyoung Electronics 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 Samyoung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samyoung Electronics has no effect on the direction of Lotte Non i.e., Lotte Non and Samyoung Electronics go up and down completely randomly.
Pair Corralation between Lotte Non and Samyoung Electronics
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to generate 2.18 times more return on investment than Samyoung Electronics. However, Lotte Non is 2.18 times more volatile than Samyoung Electronics Co. It trades about 0.18 of its potential returns per unit of risk. Samyoung Electronics Co is currently generating about 0.27 per unit of risk. If you would invest 200,000 in Lotte Non Life Insurance on October 12, 2024 and sell it today you would earn a total of 10,000 from holding Lotte Non Life Insurance or generate 5.0% 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 Insurance vs. Samyoung Electronics Co
Performance |
| Timeline |
| Lotte Non Life |
| Samyoung Electronics |
Lotte Non and Samyoung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Samyoung Electronics
The main advantage of trading using opposite Lotte Non and Samyoung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Samyoung Electronics 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 Samyoung Electronics will offset losses from the drop in Samyoung Electronics' long position.| Lotte Non vs. DB Financial Investment | Lotte Non vs. DRB Industrial Co | Lotte Non vs. Daesung Industrial Co | Lotte Non vs. Cheryong Industrial CoLtd |
| Samyoung Electronics vs. Camus Engineering Construction | Samyoung Electronics vs. Mobile Appliance | Samyoung Electronics vs. Korea Shipbuilding Offshore | Samyoung Electronics vs. Lotte Non Life Insurance |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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