Correlation Between Samick Musical and Lotte Chilsung
Can any of the company-specific risk be diversified away by investing in both Samick Musical and Lotte Chilsung 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 Samick Musical and Lotte Chilsung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samick Musical Instruments and Lotte Chilsung Beverage, you can compare the effects of market volatilities on Samick Musical and Lotte Chilsung 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 Samick Musical with a short position of Lotte Chilsung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samick Musical and Lotte Chilsung.
Diversification Opportunities for Samick Musical and Lotte Chilsung
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samick and Lotte is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Samick Musical Instruments and Lotte Chilsung Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chilsung Beverage and Samick Musical 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 Samick Musical Instruments are associated (or correlated) with Lotte Chilsung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chilsung Beverage has no effect on the direction of Samick Musical i.e., Samick Musical and Lotte Chilsung go up and down completely randomly.
Pair Corralation between Samick Musical and Lotte Chilsung
Assuming the 90 days trading horizon Samick Musical Instruments is expected to generate 0.79 times more return on investment than Lotte Chilsung. However, Samick Musical Instruments is 1.26 times less risky than Lotte Chilsung. It trades about 0.02 of its potential returns per unit of risk. Lotte Chilsung Beverage is currently generating about -0.05 per unit of risk. If you would invest 107,549 in Samick Musical Instruments on September 3, 2024 and sell it today you would earn a total of 3,251 from holding Samick Musical Instruments or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samick Musical Instruments vs. Lotte Chilsung Beverage
Performance |
| Timeline |
| Samick Musical Instr |
| Lotte Chilsung Beverage |
Samick Musical and Lotte Chilsung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samick Musical and Lotte Chilsung
The main advantage of trading using opposite Samick Musical and Lotte Chilsung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samick Musical position performs unexpectedly, Lotte Chilsung 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 Lotte Chilsung will offset losses from the drop in Lotte Chilsung's long position.| Samick Musical vs. AptaBio Therapeutics | Samick Musical vs. Daewoo SBI SPAC | Samick Musical vs. Dream Security co | Samick Musical vs. Microfriend |
| Lotte Chilsung vs. LG Display | Lotte Chilsung vs. Hyundai Motor | Lotte Chilsung vs. Hyundai Motor Co | Lotte Chilsung vs. Hyundai Motor 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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