Correlation Between Lotte Non and Sajo Seafood
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Sajo Seafood 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 Sajo Seafood 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 Sajo Seafood, you can compare the effects of market volatilities on Lotte Non and Sajo Seafood 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 Sajo Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Sajo Seafood.
Diversification Opportunities for Lotte Non and Sajo Seafood
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lotte and Sajo is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and Sajo Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sajo Seafood 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 Sajo Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sajo Seafood has no effect on the direction of Lotte Non i.e., Lotte Non and Sajo Seafood go up and down completely randomly.
Pair Corralation between Lotte Non and Sajo Seafood
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to generate 1.13 times more return on investment than Sajo Seafood. However, Lotte Non is 1.13 times more volatile than Sajo Seafood. It trades about 0.0 of its potential returns per unit of risk. Sajo Seafood is currently generating about -0.14 per unit of risk. If you would invest 204,500 in Lotte Non Life Insurance on October 17, 2024 and sell it today you would lose (500.00) from holding Lotte Non Life Insurance or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life Insurance vs. Sajo Seafood
Performance |
| Timeline |
| Lotte Non Life |
| Sajo Seafood |
Lotte Non and Sajo Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Sajo Seafood
The main advantage of trading using opposite Lotte Non and Sajo Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Sajo Seafood 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 Sajo Seafood will offset losses from the drop in Sajo Seafood's long position.| Lotte Non vs. Miwon Chemicals Co | Lotte Non vs. KB Financial Group | Lotte Non vs. Kukdong Oil Chemicals | Lotte Non vs. BNK Financial Group |
| Sajo Seafood vs. Samsung Electronics Co | Sajo Seafood vs. Samsung Electronics Co | Sajo Seafood vs. LG Energy Solution | Sajo Seafood vs. SK Hynix |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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