Correlation Between Lotte Chilsung and Myoung Shin
Can any of the company-specific risk be diversified away by investing in both Lotte Chilsung and Myoung Shin 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 Myoung Shin 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 Myoung Shin Industrial, you can compare the effects of market volatilities on Lotte Chilsung and Myoung Shin 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 Myoung Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chilsung and Myoung Shin.
Diversification Opportunities for Lotte Chilsung and Myoung Shin
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Myoung is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chilsung Beverage and Myoung Shin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myoung Shin Industrial 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 Myoung Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myoung Shin Industrial has no effect on the direction of Lotte Chilsung i.e., Lotte Chilsung and Myoung Shin go up and down completely randomly.
Pair Corralation between Lotte Chilsung and Myoung Shin
Assuming the 90 days trading horizon Lotte Chilsung Beverage is expected to generate 0.42 times more return on investment than Myoung Shin. However, Lotte Chilsung Beverage is 2.36 times less risky than Myoung Shin. It trades about 0.03 of its potential returns per unit of risk. Myoung Shin Industrial is currently generating about -0.03 per unit of risk. If you would invest 11,890,000 in Lotte Chilsung Beverage on August 25, 2024 and sell it today you would earn a total of 100,000 from holding Lotte Chilsung Beverage or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chilsung Beverage vs. Myoung Shin Industrial
Performance |
| Timeline |
| Lotte Chilsung Beverage |
| Myoung Shin Industrial |
Lotte Chilsung and Myoung Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chilsung and Myoung Shin
The main advantage of trading using opposite Lotte Chilsung and Myoung Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chilsung position performs unexpectedly, Myoung Shin 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 Myoung Shin will offset losses from the drop in Myoung Shin's long position.| Lotte Chilsung vs. AptaBio Therapeutics | Lotte Chilsung vs. Daewoo SBI SPAC | Lotte Chilsung vs. Dream Security co | Lotte Chilsung vs. Microfriend |
| Myoung Shin vs. Korea Information Engineering | Myoung Shin vs. Shinsegae Information Communication | Myoung Shin vs. Korean Drug Co | Myoung Shin vs. Polaris Office Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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