Correlation Between Dongjin Semichem and Lotte Non
Can any of the company-specific risk be diversified away by investing in both Dongjin Semichem 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 Dongjin Semichem and Lotte Non into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongjin Semichem Co and Lotte Non Life, you can compare the effects of market volatilities on Dongjin Semichem 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 Dongjin Semichem with a short position of Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongjin Semichem and Lotte Non.
Diversification Opportunities for Dongjin Semichem and Lotte Non
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dongjin and Lotte is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Dongjin Semichem Co and Lotte Non Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Non Life and Dongjin Semichem 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 Dongjin Semichem Co 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 Dongjin Semichem i.e., Dongjin Semichem and Lotte Non go up and down completely randomly.
Pair Corralation between Dongjin Semichem and Lotte Non
Assuming the 90 days trading horizon Dongjin Semichem Co is expected to under-perform the Lotte Non. But the stock apears to be less risky and, when comparing its historical volatility, Dongjin Semichem Co is 1.16 times less risky than Lotte Non. The stock trades about -0.18 of its potential returns per unit of risk. The Lotte Non Life is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 339,000 in Lotte Non Life on September 3, 2024 and sell it today you would lose (135,500) from holding Lotte Non Life or give up 39.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongjin Semichem Co vs. Lotte Non Life
Performance |
| Timeline |
| Dongjin Semichem |
| Lotte Non Life |
Dongjin Semichem and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongjin Semichem and Lotte Non
The main advantage of trading using opposite Dongjin Semichem and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongjin Semichem 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.| Dongjin Semichem vs. Wonik Ips Co | Dongjin Semichem vs. Nepes | Dongjin Semichem vs. LEENO Industrial | Dongjin Semichem vs. LF Co |
| Lotte Non vs. Dongjin Semichem Co | Lotte Non vs. AhnLab Inc | Lotte Non vs. Posco ICT | Lotte Non vs. CJ ENM |
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 CEOs Directory module to screen CEOs from public companies around the world.
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