Correlation Between Taekwang Ind and Lotte Non
Can any of the company-specific risk be diversified away by investing in both Taekwang Ind and Lotte Non 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 Taekwang Ind and Lotte Non into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taekwang Ind and Lotte Non Life Insurance, you can compare the effects of market volatilities on Taekwang Ind and Lotte Non 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 Taekwang Ind with a short position of Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taekwang Ind and Lotte Non.
Diversification Opportunities for Taekwang Ind and Lotte Non
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Taekwang and Lotte is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Taekwang Ind and Lotte Non Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Non Life and Taekwang Ind 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 Taekwang Ind are associated (or correlated) with Lotte Non. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Non Life has no effect on the direction of Taekwang Ind i.e., Taekwang Ind and Lotte Non go up and down completely randomly.
Pair Corralation between Taekwang Ind and Lotte Non
Assuming the 90 days trading horizon Taekwang Ind is expected to generate 0.71 times more return on investment than Lotte Non. However, Taekwang Ind is 1.4 times less risky than Lotte Non. It trades about 0.01 of its potential returns per unit of risk. Lotte Non Life Insurance is currently generating about 0.0 per unit of risk. If you would invest 61,720,700 in Taekwang Ind on September 3, 2024 and sell it today you would earn a total of 679,300 from holding Taekwang Ind or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taekwang Ind vs. Lotte Non Life Insurance
Performance |
| Timeline |
| Taekwang Ind |
| Lotte Non Life |
Taekwang Ind and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taekwang Ind and Lotte Non
The main advantage of trading using opposite Taekwang Ind and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taekwang Ind position performs unexpectedly, Lotte Non 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 Non will offset losses from the drop in Lotte Non's long position.| Taekwang Ind vs. LG Chemicals | Taekwang Ind vs. POSCO Holdings | Taekwang Ind vs. Hanwha Solutions | Taekwang Ind vs. Lotte Chemical Corp |
| Lotte Non vs. Seoyon Topmetal Co | Lotte Non vs. Coloray International Investment | Lotte Non vs. Daejung Chemicals Metals | Lotte Non vs. Daol Investment Securities |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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