Correlation Between Lotte Non and Eagle Veterinary
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Eagle Veterinary 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 Eagle Veterinary 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 Eagle Veterinary Technology, you can compare the effects of market volatilities on Lotte Non and Eagle Veterinary 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 Eagle Veterinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Eagle Veterinary.
Diversification Opportunities for Lotte Non and Eagle Veterinary
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lotte and Eagle is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and Eagle Veterinary Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Veterinary Tec 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 Eagle Veterinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Veterinary Tec has no effect on the direction of Lotte Non i.e., Lotte Non and Eagle Veterinary go up and down completely randomly.
Pair Corralation between Lotte Non and Eagle Veterinary
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to generate 1.39 times more return on investment than Eagle Veterinary. However, Lotte Non is 1.39 times more volatile than Eagle Veterinary Technology. It trades about 0.03 of its potential returns per unit of risk. Eagle Veterinary Technology is currently generating about -0.01 per unit of risk. If you would invest 149,000 in Lotte Non Life Insurance on August 29, 2024 and sell it today you would earn a total of 52,500 from holding Lotte Non Life Insurance or generate 35.23% 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. Eagle Veterinary Technology
Performance |
| Timeline |
| Lotte Non Life |
| Eagle Veterinary Tec |
Lotte Non and Eagle Veterinary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Eagle Veterinary
The main advantage of trading using opposite Lotte Non and Eagle Veterinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Eagle Veterinary 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 Eagle Veterinary will offset losses from the drop in Eagle Veterinary's long position.| Lotte Non vs. AptaBio Therapeutics | Lotte Non vs. Daewoo SBI SPAC | Lotte Non vs. Dream Security co | Lotte Non vs. Microfriend |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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