Correlation Between Lotte Chilsung and Playgram
Can any of the company-specific risk be diversified away by investing in both Lotte Chilsung and Playgram 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 Playgram 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 Playgram Co, you can compare the effects of market volatilities on Lotte Chilsung and Playgram 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 Playgram. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chilsung and Playgram.
Diversification Opportunities for Lotte Chilsung and Playgram
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lotte and Playgram is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chilsung Beverage and Playgram Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playgram 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 Playgram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playgram has no effect on the direction of Lotte Chilsung i.e., Lotte Chilsung and Playgram go up and down completely randomly.
Pair Corralation between Lotte Chilsung and Playgram
Assuming the 90 days trading horizon Lotte Chilsung Beverage is expected to under-perform the Playgram. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Chilsung Beverage is 2.7 times less risky than Playgram. The stock trades about -0.04 of its potential returns per unit of risk. The Playgram Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 88,700 in Playgram Co on October 13, 2024 and sell it today you would lose (47,700) from holding Playgram Co or give up 53.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chilsung Beverage vs. Playgram Co
Performance |
| Timeline |
| Lotte Chilsung Beverage |
| Playgram |
Lotte Chilsung and Playgram Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chilsung and Playgram
The main advantage of trading using opposite Lotte Chilsung and Playgram positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chilsung position performs unexpectedly, Playgram 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 Playgram will offset losses from the drop in Playgram's long position.| Lotte Chilsung vs. System and Application | Lotte Chilsung vs. Hanshin Construction Co | Lotte Chilsung vs. Dongbang Transport Logistics | Lotte Chilsung vs. Daou Data Corp |
| Playgram vs. Lotte Chilsung Beverage | Playgram vs. Cuckoo Electronics Co | Playgram vs. Samyoung Electronics Co | Playgram vs. Sam Yang Foods |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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