Correlation Between Shinil Electronics and Lotte Data
Can any of the company-specific risk be diversified away by investing in both Shinil Electronics and Lotte Data 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 Shinil Electronics and Lotte Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinil Electronics Co and Lotte Data Communication, you can compare the effects of market volatilities on Shinil Electronics and Lotte Data 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 Shinil Electronics with a short position of Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinil Electronics and Lotte Data.
Diversification Opportunities for Shinil Electronics and Lotte Data
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shinil and Lotte is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Shinil Electronics Co and Lotte Data Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Data Communication and Shinil Electronics 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 Shinil Electronics Co are associated (or correlated) with Lotte Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Data Communication has no effect on the direction of Shinil Electronics i.e., Shinil Electronics and Lotte Data go up and down completely randomly.
Pair Corralation between Shinil Electronics and Lotte Data
Assuming the 90 days trading horizon Shinil Electronics Co is expected to under-perform the Lotte Data. But the stock apears to be less risky and, when comparing its historical volatility, Shinil Electronics Co is 2.74 times less risky than Lotte Data. The stock trades about -0.07 of its potential returns per unit of risk. The Lotte Data Communication is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,609,206 in Lotte Data Communication on August 24, 2024 and sell it today you would lose (594,206) from holding Lotte Data Communication or give up 22.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinil Electronics Co vs. Lotte Data Communication
Performance |
| Timeline |
| Shinil Electronics |
| Lotte Data Communication |
Shinil Electronics and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinil Electronics and Lotte Data
The main advantage of trading using opposite Shinil Electronics and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinil Electronics position performs unexpectedly, Lotte Data 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 Data will offset losses from the drop in Lotte Data's long position.| Shinil Electronics vs. Sangsin Energy Display | Shinil Electronics vs. Hana Financial | Shinil Electronics vs. Shinhan Financial Group | Shinil Electronics vs. Digital Power Communications |
| Lotte Data vs. Daejung Chemicals Metals | Lotte Data vs. Digital Power Communications | Lotte Data vs. Ssangyong Information Communication | Lotte Data vs. SK Telecom 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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