Correlation Between Lotte Non and Samsung Card
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Samsung Card 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 Samsung Card 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 Samsung Card Co, you can compare the effects of market volatilities on Lotte Non and Samsung Card 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 Samsung Card. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Samsung Card.
Diversification Opportunities for Lotte Non and Samsung Card
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lotte and Samsung is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and Samsung Card Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Card 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 Samsung Card. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Card has no effect on the direction of Lotte Non i.e., Lotte Non and Samsung Card go up and down completely randomly.
Pair Corralation between Lotte Non and Samsung Card
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to generate 0.9 times more return on investment than Samsung Card. However, Lotte Non Life Insurance is 1.11 times less risky than Samsung Card. It trades about 0.12 of its potential returns per unit of risk. Samsung Card Co is currently generating about -0.01 per unit of risk. If you would invest 204,500 in Lotte Non Life Insurance on October 14, 2024 and sell it today you would earn a total of 6,000 from holding Lotte Non Life Insurance or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life Insurance vs. Samsung Card Co
Performance |
| Timeline |
| Lotte Non Life |
| Samsung Card |
Lotte Non and Samsung Card Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Samsung Card
The main advantage of trading using opposite Lotte Non and Samsung Card positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Samsung Card 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 Samsung Card will offset losses from the drop in Samsung Card'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 |
| Samsung Card vs. Ilji Technology Co | Samsung Card vs. Seers Technology | Samsung Card vs. Lotte Non Life Insurance | Samsung Card vs. Innowireless 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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