Correlation Between Lotte Non and Vissem Electronics
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Vissem Electronics 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 Vissem Electronics 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 Vissem Electronics Co, you can compare the effects of market volatilities on Lotte Non and Vissem Electronics 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 Vissem Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Vissem Electronics.
Diversification Opportunities for Lotte Non and Vissem Electronics
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lotte and Vissem is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and Vissem Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vissem Electronics 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 Vissem Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vissem Electronics has no effect on the direction of Lotte Non i.e., Lotte Non and Vissem Electronics go up and down completely randomly.
Pair Corralation between Lotte Non and Vissem Electronics
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to under-perform the Vissem Electronics. In addition to that, Lotte Non is 1.24 times more volatile than Vissem Electronics Co. It trades about -0.07 of its total potential returns per unit of risk. Vissem Electronics Co is currently generating about 0.13 per unit of volatility. If you would invest 352,500 in Vissem Electronics Co on October 30, 2024 and sell it today you would earn a total of 9,000 from holding Vissem Electronics Co or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life Insurance vs. Vissem Electronics Co
Performance |
| Timeline |
| Lotte Non Life |
| Vissem Electronics |
Lotte Non and Vissem Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Vissem Electronics
The main advantage of trading using opposite Lotte Non and Vissem Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Vissem Electronics 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 Vissem Electronics will offset losses from the drop in Vissem Electronics' long position.| Lotte Non vs. Insung Information Co | Lotte Non vs. Nice Information Telecommunication | Lotte Non vs. Lotte Data Communication | Lotte Non vs. Alton Sports CoLtd |
| Vissem Electronics vs. TJ media Co | Vissem Electronics vs. Infinitt Healthcare Co | Vissem Electronics vs. LG Household Healthcare | Vissem Electronics vs. ChipsMedia |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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