Correlation Between Lotte Fine and Golden Bridge
Can any of the company-specific risk be diversified away by investing in both Lotte Fine and Golden Bridge 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 Lotte Fine and Golden Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Fine Chemical and Golden Bridge Investment, you can compare the effects of market volatilities on Lotte Fine and Golden Bridge 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 Lotte Fine with a short position of Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Fine and Golden Bridge.
Diversification Opportunities for Lotte Fine and Golden Bridge
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lotte and Golden is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Fine Chemical and Golden Bridge Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Bridge Investment and Lotte Fine 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 Lotte Fine Chemical are associated (or correlated) with Golden Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Bridge Investment has no effect on the direction of Lotte Fine i.e., Lotte Fine and Golden Bridge go up and down completely randomly.
Pair Corralation between Lotte Fine and Golden Bridge
Assuming the 90 days trading horizon Lotte Fine Chemical is expected to generate 2.48 times more return on investment than Golden Bridge. However, Lotte Fine is 2.48 times more volatile than Golden Bridge Investment. It trades about 0.05 of its potential returns per unit of risk. Golden Bridge Investment is currently generating about -0.03 per unit of risk. If you would invest 3,915,000 in Lotte Fine Chemical on November 3, 2024 and sell it today you would earn a total of 55,000 from holding Lotte Fine Chemical or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Fine Chemical vs. Golden Bridge Investment
Performance |
| Timeline |
| Lotte Fine Chemical |
| Golden Bridge Investment |
Lotte Fine and Golden Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Fine and Golden Bridge
The main advantage of trading using opposite Lotte Fine and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Fine position performs unexpectedly, Golden Bridge 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 Golden Bridge will offset losses from the drop in Golden Bridge's long position.| Lotte Fine vs. Insun Environment New | Lotte Fine vs. BooKook Steel Co | Lotte Fine vs. Hankukpackage Co | Lotte Fine vs. Lotte Non Life Insurance |
| Golden Bridge vs. E Investment Development | Golden Bridge vs. EBEST Investment Securities | Golden Bridge vs. Daol Investment Securities | Golden Bridge vs. SBI Investment KOREA |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |