Correlation Between Lotte Non and Nable Communications
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Nable Communications 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 Nable Communications 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 Nable Communications, you can compare the effects of market volatilities on Lotte Non and Nable Communications 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 Nable Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Nable Communications.
Diversification Opportunities for Lotte Non and Nable Communications
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lotte and Nable is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and Nable Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nable Communications 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 Nable Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nable Communications has no effect on the direction of Lotte Non i.e., Lotte Non and Nable Communications go up and down completely randomly.
Pair Corralation between Lotte Non and Nable Communications
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to under-perform the Nable Communications. In addition to that, Lotte Non is 1.88 times more volatile than Nable Communications. It trades about -0.18 of its total potential returns per unit of risk. Nable Communications is currently generating about 0.11 per unit of volatility. If you would invest 626,000 in Nable Communications on August 25, 2024 and sell it today you would earn a total of 19,000 from holding Nable Communications or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life Insurance vs. Nable Communications
Performance |
| Timeline |
| Lotte Non Life |
| Nable Communications |
Lotte Non and Nable Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Nable Communications
The main advantage of trading using opposite Lotte Non and Nable Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Nable Communications 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 Nable Communications will offset losses from the drop in Nable Communications' long position.| Lotte Non vs. AptaBio Therapeutics | Lotte Non vs. Daewoo SBI SPAC | Lotte Non vs. Dream Security co | Lotte Non vs. Microfriend |
| Nable Communications vs. Korea Real Estate | Nable Communications vs. Korea Ratings Co | Nable Communications vs. IQuest Co | Nable Communications vs. Wonbang Tech 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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