Correlation Between Lotte Non and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Lotte Non and Shinhan Inverse 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 Shinhan Inverse 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 Shinhan Inverse Silver, you can compare the effects of market volatilities on Lotte Non and Shinhan Inverse 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 Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Non and Shinhan Inverse.
Diversification Opportunities for Lotte Non and Shinhan Inverse
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Shinhan is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Non Life Insurance and Shinhan Inverse Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse Silver 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 Shinhan Inverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Inverse Silver has no effect on the direction of Lotte Non i.e., Lotte Non and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Lotte Non and Shinhan Inverse
Assuming the 90 days trading horizon Lotte Non Life Insurance is expected to generate 1.96 times more return on investment than Shinhan Inverse. However, Lotte Non is 1.96 times more volatile than Shinhan Inverse Silver. It trades about 0.03 of its potential returns per unit of risk. Shinhan Inverse Silver is currently generating about -0.03 per unit of risk. If you would invest 156,300 in Lotte Non Life Insurance on November 9, 2024 and sell it today you would earn a total of 31,400 from holding Lotte Non Life Insurance or generate 20.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Lotte Non Life Insurance vs. Shinhan Inverse Silver
Performance |
| Timeline |
| Lotte Non Life |
| Shinhan Inverse Silver |
Lotte Non and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Non and Shinhan Inverse
The main advantage of trading using opposite Lotte Non and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Non position performs unexpectedly, Shinhan Inverse 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 Shinhan Inverse will offset losses from the drop in Shinhan Inverse's long position.| Lotte Non vs. SCI Information Service | Lotte Non vs. Cuckoo Homesys Co | Lotte Non vs. Hwangkum Steel Technology | Lotte Non vs. Seers Technology |
| Shinhan Inverse vs. AptaBio Therapeutics | Shinhan Inverse vs. Daewoo SBI SPAC | Shinhan Inverse vs. Dream Security co | Shinhan Inverse vs. Microfriend |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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