Correlation Between Lotte Non-Life and COWINTECH
Can any of the company-specific risk be diversified away by investing in both Lotte Non-Life and COWINTECH 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-Life and COWINTECH 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 COWINTECH Co, you can compare the effects of market volatilities on Lotte Non-Life and COWINTECH 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-Life with a short position of COWINTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non-Life and COWINTECH.
Diversification Opportunities for Lotte Non-Life and COWINTECH
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and COWINTECH is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and COWINTECH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COWINTECH and Lotte Non-Life 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 COWINTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COWINTECH has no effect on the direction of Lotte Non-Life i.e., Lotte Non-Life and COWINTECH go up and down completely randomly.
Pair Corralation between Lotte Non-Life and COWINTECH
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to under-perform the COWINTECH. In addition to that, Lotte Non-Life is 1.01 times more volatile than COWINTECH Co. It trades about -0.14 of its total potential returns per unit of risk. COWINTECH Co is currently generating about 0.29 per unit of volatility. If you would invest 1,481,000 in COWINTECH Co on November 27, 2024 and sell it today you would earn a total of 153,000 from holding COWINTECH Co or generate 10.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Non Life Insurance vs. COWINTECH Co
Performance |
| Timeline |
| Lotte Non Life |
| COWINTECH |
Lotte Non-Life and COWINTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non-Life and COWINTECH
The main advantage of trading using opposite Lotte Non-Life and COWINTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non-Life position performs unexpectedly, COWINTECH 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 COWINTECH will offset losses from the drop in COWINTECH's long position.| Lotte Non-Life vs. JYP Entertainment Corp | Lotte Non-Life vs. Iljin Display | Lotte Non-Life vs. Digital Multimedia Technology | Lotte Non-Life vs. Playgram Co |
| COWINTECH vs. Shinhan Inverse Silver | COWINTECH vs. Nice Information Telecommunication | COWINTECH vs. Taegu Broadcasting | COWINTECH vs. CKH Food Health |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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