Correlation Between Lotte Non and GS Retail
Can any of the company-specific risk be diversified away by investing in both Lotte Non and GS Retail 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 GS Retail 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 GS Retail Co, you can compare the effects of market volatilities on Lotte Non and GS Retail 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 GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and GS Retail.
Diversification Opportunities for Lotte Non and GS Retail
Very weak diversification
The 3 months correlation between Lotte and 007070 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail 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 GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of Lotte Non i.e., Lotte Non and GS Retail go up and down completely randomly.
Pair Corralation between Lotte Non and GS Retail
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to generate 1.98 times more return on investment than GS Retail. However, Lotte Non is 1.98 times more volatile than GS Retail Co. It trades about 0.03 of its potential returns per unit of risk. GS Retail Co is currently generating about -0.05 per unit of risk. If you would invest 158,000 in Lotte Non Life Insurance on November 20, 2024 and sell it today you would earn a total of 23,400 from holding Lotte Non Life Insurance or generate 14.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 96.44% |
Values | Daily Returns |
Lotte Non Life Insurance vs. GS Retail Co
Performance |
Timeline |
Lotte Non Life |
GS Retail |
Lotte Non and GS Retail Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lotte Non and GS Retail
The main advantage of trading using opposite Lotte Non and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, GS Retail 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 GS Retail will offset losses from the drop in GS Retail's long position.Lotte Non vs. Neungyule Education | ||
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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