Correlation Between Samyung Trading and Lotte Rental
Can any of the company-specific risk be diversified away by investing in both Samyung Trading and Lotte Rental 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 Samyung Trading and Lotte Rental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samyung Trading Co and Lotte Rental Co, you can compare the effects of market volatilities on Samyung Trading and Lotte Rental 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 Samyung Trading with a short position of Lotte Rental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyung Trading and Lotte Rental.
Diversification Opportunities for Samyung Trading and Lotte Rental
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samyung and Lotte is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Samyung Trading Co and Lotte Rental Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Rental and Samyung Trading 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 Samyung Trading Co are associated (or correlated) with Lotte Rental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Rental has no effect on the direction of Samyung Trading i.e., Samyung Trading and Lotte Rental go up and down completely randomly.
Pair Corralation between Samyung Trading and Lotte Rental
Assuming the 90 days trading horizon Samyung Trading Co is expected to generate 0.4 times more return on investment than Lotte Rental. However, Samyung Trading Co is 2.48 times less risky than Lotte Rental. It trades about -0.11 of its potential returns per unit of risk. Lotte Rental Co is currently generating about -0.23 per unit of risk. If you would invest 1,263,000 in Samyung Trading Co on November 7, 2024 and sell it today you would lose (13,000) from holding Samyung Trading Co or give up 1.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Samyung Trading Co vs. Lotte Rental Co
Performance |
| Timeline |
| Samyung Trading |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lotte Rental |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Samyung Trading and Lotte Rental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samyung Trading and Lotte Rental
The main advantage of trading using opposite Samyung Trading and Lotte Rental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyung Trading position performs unexpectedly, Lotte Rental 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 Rental will offset losses from the drop in Lotte Rental's long position.| Samyung Trading vs. Yura Tech Co | Samyung Trading vs. Raontech | Samyung Trading vs. V One Tech Co | Samyung Trading vs. Seoul Semiconductor Co |
| Lotte Rental vs. Polaris Office Corp | Lotte Rental vs. Dongbang Transport Logistics | Lotte Rental vs. Ilji Technology Co | Lotte Rental vs. People Technology |
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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