Correlation Between Lotte Chilsung and Booster
Can any of the company-specific risk be diversified away by investing in both Lotte Chilsung and Booster 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 Booster 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 Booster Co, you can compare the effects of market volatilities on Lotte Chilsung and Booster 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 Booster. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chilsung and Booster.
Diversification Opportunities for Lotte Chilsung and Booster
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotte and Booster is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chilsung Beverage and Booster Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booster 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 Booster. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booster has no effect on the direction of Lotte Chilsung i.e., Lotte Chilsung and Booster go up and down completely randomly.
Pair Corralation between Lotte Chilsung and Booster
Assuming the 90 days trading horizon Lotte Chilsung Beverage is expected to generate 1.24 times more return on investment than Booster. However, Lotte Chilsung is 1.24 times more volatile than Booster Co. It trades about 0.24 of its potential returns per unit of risk. Booster Co is currently generating about -0.02 per unit of risk. If you would invest 10,940,000 in Lotte Chilsung Beverage on September 14, 2024 and sell it today you would earn a total of 1,090,000 from holding Lotte Chilsung Beverage or generate 9.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chilsung Beverage vs. Booster Co
Performance |
| Timeline |
| Lotte Chilsung Beverage |
| Booster |
Lotte Chilsung and Booster Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chilsung and Booster
The main advantage of trading using opposite Lotte Chilsung and Booster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chilsung position performs unexpectedly, Booster 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 Booster will offset losses from the drop in Booster's long position.| Lotte Chilsung vs. Korea New Network | Lotte Chilsung vs. ICD Co | Lotte Chilsung vs. DYPNF CoLtd | Lotte Chilsung vs. Solution Advanced Technology |
| Booster vs. SungMoon Electronics Co | Booster vs. EBEST Investment Securities | Booster vs. Golden Bridge Investment | Booster vs. ABOV Semiconductor Co |
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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