Correlation Between Lotte Corp and TS Investment
Can any of the company-specific risk be diversified away by investing in both Lotte Corp and TS Investment 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 Corp and TS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Corp and TS Investment Corp, you can compare the effects of market volatilities on Lotte Corp and TS Investment 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 Corp with a short position of TS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Corp and TS Investment.
Diversification Opportunities for Lotte Corp and TS Investment
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lotte and 246690 is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Corp and TS Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TS Investment Corp and Lotte Corp 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 Corp are associated (or correlated) with TS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TS Investment Corp has no effect on the direction of Lotte Corp i.e., Lotte Corp and TS Investment go up and down completely randomly.
Pair Corralation between Lotte Corp and TS Investment
Assuming the 90 days trading horizon Lotte Corp is expected to generate 1.14 times more return on investment than TS Investment. However, Lotte Corp is 1.14 times more volatile than TS Investment Corp. It trades about -0.26 of its potential returns per unit of risk. TS Investment Corp is currently generating about -0.32 per unit of risk. If you would invest 2,350,000 in Lotte Corp on September 4, 2024 and sell it today you would lose (310,000) from holding Lotte Corp or give up 13.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Corp vs. TS Investment Corp
Performance |
| Timeline |
| Lotte Corp |
| TS Investment Corp |
Lotte Corp and TS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Corp and TS Investment
The main advantage of trading using opposite Lotte Corp and TS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Corp position performs unexpectedly, TS Investment 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 TS Investment will offset losses from the drop in TS Investment's long position.| Lotte Corp vs. TS Investment Corp | Lotte Corp vs. Pureun Mutual Savings | Lotte Corp vs. Samick Musical Instruments | Lotte Corp vs. Nh Investment And |
| TS Investment vs. Samsung Electronics Co | TS Investment vs. Samsung Electronics Co | TS Investment vs. LG Energy Solution | TS Investment vs. SK Hynix |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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