Correlation Between Lotte Chilsung and Samlip General
Can any of the company-specific risk be diversified away by investing in both Lotte Chilsung and Samlip General 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 Chilsung and Samlip General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Chilsung Beverage and Samlip General Foods, you can compare the effects of market volatilities on Lotte Chilsung and Samlip General 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 Chilsung with a short position of Samlip General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chilsung and Samlip General.
Diversification Opportunities for Lotte Chilsung and Samlip General
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lotte and Samlip is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chilsung Beverage and Samlip General Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samlip General Foods and Lotte Chilsung 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 Chilsung Beverage are associated (or correlated) with Samlip General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samlip General Foods has no effect on the direction of Lotte Chilsung i.e., Lotte Chilsung and Samlip General go up and down completely randomly.
Pair Corralation between Lotte Chilsung and Samlip General
Assuming the 90 days trading horizon Lotte Chilsung Beverage is expected to generate 0.94 times more return on investment than Samlip General. However, Lotte Chilsung Beverage is 1.07 times less risky than Samlip General. It trades about 0.15 of its potential returns per unit of risk. Samlip General Foods is currently generating about -0.08 per unit of risk. If you would invest 11,260,000 in Lotte Chilsung Beverage on September 12, 2024 and sell it today you would earn a total of 720,000 from holding Lotte Chilsung Beverage or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lotte Chilsung Beverage vs. Samlip General Foods
Performance |
| Timeline |
| Lotte Chilsung Beverage |
| Samlip General Foods |
Lotte Chilsung and Samlip General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chilsung and Samlip General
The main advantage of trading using opposite Lotte Chilsung and Samlip General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chilsung position performs unexpectedly, Samlip General 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 Samlip General will offset losses from the drop in Samlip General's long position.| Lotte Chilsung vs. Samsung Electronics Co | Lotte Chilsung vs. Samsung Electronics Co | Lotte Chilsung vs. LG Energy Solution | Lotte Chilsung vs. SK Hynix |
| Samlip General vs. Samsung Electronics Co | Samlip General vs. Samsung Electronics Co | Samlip General vs. SK Hynix | Samlip General vs. POSCO Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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