Correlation Between Lotte Fine and Hanwha InvestmentSecuri
Can any of the company-specific risk be diversified away by investing in both Lotte Fine and Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri 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 Hanwha InvestmentSecurities Co, you can compare the effects of market volatilities on Lotte Fine and Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Fine and Hanwha InvestmentSecuri.
Diversification Opportunities for Lotte Fine and Hanwha InvestmentSecuri
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lotte and Hanwha is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Fine Chemical and Hanwha InvestmentSecurities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha InvestmentSecuri has no effect on the direction of Lotte Fine i.e., Lotte Fine and Hanwha InvestmentSecuri go up and down completely randomly.
Pair Corralation between Lotte Fine and Hanwha InvestmentSecuri
Assuming the 90 days trading horizon Lotte Fine Chemical is expected to under-perform the Hanwha InvestmentSecuri. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Fine Chemical is 2.6 times less risky than Hanwha InvestmentSecuri. The stock trades about -0.37 of its potential returns per unit of risk. The Hanwha InvestmentSecurities Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 644,000 in Hanwha InvestmentSecurities Co on August 28, 2024 and sell it today you would earn a total of 86,000 from holding Hanwha InvestmentSecurities Co or generate 13.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Fine Chemical vs. Hanwha InvestmentSecurities Co
Performance |
| Timeline |
| Lotte Fine Chemical |
| Hanwha InvestmentSecuri |
Lotte Fine and Hanwha InvestmentSecuri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Fine and Hanwha InvestmentSecuri
The main advantage of trading using opposite Lotte Fine and Hanwha InvestmentSecuri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Fine position performs unexpectedly, Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri will offset losses from the drop in Hanwha InvestmentSecuri's long position.| Lotte Fine vs. LG Chemicals | Lotte Fine vs. Lotte Chemical Corp | Lotte Fine vs. Hyundai Steel | Lotte Fine vs. Seah Steel 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| CEOs Directory Screen CEOs from public companies around the world |