Correlation Between Lotte Non and Camus Engineering
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Camus Engineering 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 Camus Engineering 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 Camus Engineering Construction, you can compare the effects of market volatilities on Lotte Non and Camus Engineering 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 Camus Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Camus Engineering.
Diversification Opportunities for Lotte Non and Camus Engineering
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lotte and Camus is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and Camus Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camus Engineering 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 Camus Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camus Engineering has no effect on the direction of Lotte Non i.e., Lotte Non and Camus Engineering go up and down completely randomly.
Pair Corralation between Lotte Non and Camus Engineering
Assuming the 90 days trading horizon Lotte Non is expected to generate 6.19 times less return on investment than Camus Engineering. But when comparing it to its historical volatility, Lotte Non Life Insurance is 5.51 times less risky than Camus Engineering. It trades about 0.12 of its potential returns per unit of risk. Camus Engineering Construction is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 134,800 in Camus Engineering Construction on October 14, 2024 and sell it today you would earn a total of 21,000 from holding Camus Engineering Construction or generate 15.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life Insurance vs. Camus Engineering Construction
Performance |
| Timeline |
| Lotte Non Life |
| Camus Engineering |
Lotte Non and Camus Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Camus Engineering
The main advantage of trading using opposite Lotte Non and Camus Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Camus Engineering 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 Camus Engineering will offset losses from the drop in Camus Engineering's long position.| Lotte Non vs. Lotte Data Communication | Lotte Non vs. PJ Metal Co | Lotte Non vs. Daejung Chemicals Metals | Lotte Non vs. Nice Information Telecommunication |
| Camus Engineering vs. Lotte Non Life Insurance | Camus Engineering vs. Sangsin Energy Display | Camus Engineering vs. Daishin Information Communications | Camus Engineering vs. Lotte Data Communication |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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