Correlation Between Lotte Non and Alton Sports
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Alton Sports 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 Alton Sports 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 Alton Sports CoLtd, you can compare the effects of market volatilities on Lotte Non and Alton Sports 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 Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Alton Sports.
Diversification Opportunities for Lotte Non and Alton Sports
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotte and Alton is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports CoLtd 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 Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of Lotte Non i.e., Lotte Non and Alton Sports go up and down completely randomly.
Pair Corralation between Lotte Non and Alton Sports
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to generate 1.41 times more return on investment than Alton Sports. However, Lotte Non is 1.41 times more volatile than Alton Sports CoLtd. It trades about 0.03 of its potential returns per unit of risk. Alton Sports CoLtd is currently generating about -0.08 per unit of risk. If you would invest 151,500 in Lotte Non Life Insurance on September 3, 2024 and sell it today you would earn a total of 52,000 from holding Lotte Non Life Insurance or generate 34.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life Insurance vs. Alton Sports CoLtd
Performance |
| Timeline |
| Lotte Non Life |
| Alton Sports CoLtd |
Lotte Non and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Alton Sports
The main advantage of trading using opposite Lotte Non and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Alton Sports 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 Alton Sports will offset losses from the drop in Alton Sports' long position.| Lotte Non vs. Seoyon Topmetal Co | Lotte Non vs. Coloray International Investment | Lotte Non vs. Daejung Chemicals Metals | Lotte Non vs. Daol Investment Securities |
| Alton Sports vs. Korea Information Communications | Alton Sports vs. Korean Reinsurance Co | Alton Sports vs. Lotte Non Life Insurance | Alton Sports vs. Sempio Foods Co |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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