Correlation Between Lotte Non and Shinsegae Information
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Shinsegae Information 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 Information 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 Information Communication, you can compare the effects of market volatilities on Lotte Non and Shinsegae Information 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 Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Shinsegae Information.
Diversification Opportunities for Lotte Non and Shinsegae Information
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lotte and Shinsegae is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and Shinsegae Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Information 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 Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Information has no effect on the direction of Lotte Non i.e., Lotte Non and Shinsegae Information go up and down completely randomly.
Pair Corralation between Lotte Non and Shinsegae Information
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to under-perform the Shinsegae Information. In addition to that, Lotte Non is 1.62 times more volatile than Shinsegae Information Communication. It trades about -0.15 of its total potential returns per unit of risk. Shinsegae Information Communication is currently generating about -0.22 per unit of volatility. If you would invest 985,000 in Shinsegae Information Communication on August 28, 2024 and sell it today you would lose (76,000) from holding Shinsegae Information Communication or give up 7.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life Insurance vs. Shinsegae Information Communic
Performance |
| Timeline |
| Lotte Non Life |
| Shinsegae Information |
Lotte Non and Shinsegae Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Shinsegae Information
The main advantage of trading using opposite Lotte Non and Shinsegae Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Shinsegae Information 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 Information will offset losses from the drop in Shinsegae Information'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 Information vs. AptaBio Therapeutics | Shinsegae Information vs. Daewoo SBI SPAC | Shinsegae Information vs. Dream Security co | Shinsegae Information vs. Microfriend |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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