Correlation Between Sam Yang and Lotte Data
Can any of the company-specific risk be diversified away by investing in both Sam Yang 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 Sam Yang and Lotte Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sam Yang Foods and Lotte Data Communication, you can compare the effects of market volatilities on Sam Yang 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 Sam Yang with a short position of Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sam Yang and Lotte Data.
Diversification Opportunities for Sam Yang and Lotte Data
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sam and Lotte is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sam Yang Foods 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 Sam Yang 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 Sam Yang Foods 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 Sam Yang i.e., Sam Yang and Lotte Data go up and down completely randomly.
Pair Corralation between Sam Yang and Lotte Data
Assuming the 90 days trading horizon Sam Yang Foods is expected to generate 1.13 times more return on investment than Lotte Data. However, Sam Yang is 1.13 times more volatile than Lotte Data Communication. It trades about 0.12 of its potential returns per unit of risk. Lotte Data Communication is currently generating about -0.01 per unit of risk. If you would invest 11,851,700 in Sam Yang Foods on November 1, 2024 and sell it today you would earn a total of 59,148,300 from holding Sam Yang Foods or generate 499.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sam Yang Foods vs. Lotte Data Communication
Performance |
| Timeline |
| Sam Yang Foods |
| Lotte Data Communication |
Sam Yang and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sam Yang and Lotte Data
The main advantage of trading using opposite Sam Yang and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sam Yang 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.| Sam Yang vs. Shinhan Inverse Silver | Sam Yang vs. Hanmi Semiconductor Co | Sam Yang vs. Netmarble Games Corp | Sam Yang vs. Kakao Games Corp |
| Lotte Data vs. Korea Steel Co | Lotte Data vs. Wonil Special Steel | Lotte Data vs. Korean Reinsurance Co | Lotte Data vs. SeAH Besteel Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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