Correlation Between Lotte Non and Tway Air
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Tway Air 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 Tway Air 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 Tway Air Co, you can compare the effects of market volatilities on Lotte Non and Tway Air 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 Tway Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Tway Air.
Diversification Opportunities for Lotte Non and Tway Air
Weak diversification
The 3 months correlation between Lotte and Tway is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and Tway Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tway Air 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 Tway Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tway Air has no effect on the direction of Lotte Non i.e., Lotte Non and Tway Air go up and down completely randomly.
Pair Corralation between Lotte Non and Tway Air
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to under-perform the Tway Air. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Non Life Insurance is 3.71 times less risky than Tway Air. The stock trades about -0.2 of its potential returns per unit of risk. The Tway Air Co is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 275,500 in Tway Air Co on November 7, 2024 and sell it today you would earn a total of 114,500 from holding Tway Air Co or generate 41.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life Insurance vs. Tway Air Co
Performance |
| Timeline |
| Lotte Non Life |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tway Air |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Lotte Non and Tway Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Tway Air
The main advantage of trading using opposite Lotte Non and Tway Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Tway Air 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 Tway Air will offset losses from the drop in Tway Air's long position.| Lotte Non vs. Dongbang Transport Logistics | Lotte Non vs. PH Tech Co | Lotte Non vs. SK Chemicals Co | Lotte Non vs. Polaris Office Corp |
| Tway Air vs. Daehan Synthetic Fiber | Tway Air vs. Hansol Chemical Co | Tway Air vs. Automobile Pc | Tway Air vs. Korea Information Communications |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |