Correlation Between Lotte Non and Shinsegae Food
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Shinsegae Food 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 Shinsegae Food 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 Shinsegae Food, you can compare the effects of market volatilities on Lotte Non and Shinsegae Food 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 Shinsegae Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Shinsegae Food.
Diversification Opportunities for Lotte Non and Shinsegae Food
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lotte and Shinsegae is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and Shinsegae Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Food 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 Shinsegae Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Food has no effect on the direction of Lotte Non i.e., Lotte Non and Shinsegae Food go up and down completely randomly.
Pair Corralation between Lotte Non and Shinsegae Food
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to under-perform the Shinsegae Food. In addition to that, Lotte Non is 2.0 times more volatile than Shinsegae Food. It trades about -0.15 of its total potential returns per unit of risk. Shinsegae Food is currently generating about -0.13 per unit of volatility. If you would invest 3,485,000 in Shinsegae Food on August 29, 2024 and sell it today you would lose (140,000) from holding Shinsegae Food or give up 4.02% 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. Shinsegae Food
Performance |
| Timeline |
| Lotte Non Life |
| Shinsegae Food |
Lotte Non and Shinsegae Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Shinsegae Food
The main advantage of trading using opposite Lotte Non and Shinsegae Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Shinsegae Food 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 Shinsegae Food will offset losses from the drop in Shinsegae Food's long position.| Lotte Non vs. AptaBio Therapeutics | Lotte Non vs. Daewoo SBI SPAC | Lotte Non vs. Dream Security co | Lotte Non vs. Microfriend |
| Shinsegae Food vs. KMH Hitech Co | Shinsegae Food vs. GemVaxKAEL CoLtd | Shinsegae Food vs. Busan Industrial Co | Shinsegae Food vs. Busan Ind |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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