Correlation Between Lotte Non and Konan Technology
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Konan Technology 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 Konan Technology 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 Konan Technology, you can compare the effects of market volatilities on Lotte Non and Konan Technology 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 Konan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Konan Technology.
Diversification Opportunities for Lotte Non and Konan Technology
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lotte and Konan is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and Konan Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konan Technology 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 Konan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konan Technology has no effect on the direction of Lotte Non i.e., Lotte Non and Konan Technology go up and down completely randomly.
Pair Corralation between Lotte Non and Konan Technology
Assuming the 90 days trading horizon Lotte Non is expected to generate 2.8 times less return on investment than Konan Technology. But when comparing it to its historical volatility, Lotte Non Life Insurance is 1.53 times less risky than Konan Technology. It trades about 0.03 of its potential returns per unit of risk. Konan Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 950,000 in Konan Technology on August 29, 2024 and sell it today you would earn a total of 1,580,000 from holding Konan Technology or generate 166.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Lotte Non Life Insurance vs. Konan Technology
Performance |
| Timeline |
| Lotte Non Life |
| Konan Technology |
Lotte Non and Konan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Konan Technology
The main advantage of trading using opposite Lotte Non and Konan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Konan Technology 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 Konan Technology will offset losses from the drop in Konan Technology's long position.| Lotte Non vs. AptaBio Therapeutics | Lotte Non vs. Daewoo SBI SPAC | Lotte Non vs. Dream Security co | Lotte Non vs. Microfriend |
| Konan Technology vs. Posco ICT | Konan Technology vs. Devsisters corporation | Konan Technology vs. Nice Information Telecommunication | Konan Technology vs. InfoBank |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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