Correlation Between Lotte Chilsung and Jinro Distillers
Can any of the company-specific risk be diversified away by investing in both Lotte Chilsung and Jinro Distillers 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 Jinro Distillers 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 Jinro Distillers Co, you can compare the effects of market volatilities on Lotte Chilsung and Jinro Distillers 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 Jinro Distillers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chilsung and Jinro Distillers.
Diversification Opportunities for Lotte Chilsung and Jinro Distillers
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Jinro is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chilsung Beverage and Jinro Distillers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinro Distillers 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 Jinro Distillers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinro Distillers has no effect on the direction of Lotte Chilsung i.e., Lotte Chilsung and Jinro Distillers go up and down completely randomly.
Pair Corralation between Lotte Chilsung and Jinro Distillers
Assuming the 90 days trading horizon Lotte Chilsung Beverage is expected to under-perform the Jinro Distillers. In addition to that, Lotte Chilsung is 2.92 times more volatile than Jinro Distillers Co. It trades about -0.36 of its total potential returns per unit of risk. Jinro Distillers Co is currently generating about 0.2 per unit of volatility. If you would invest 1,687,000 in Jinro Distillers Co on October 28, 2024 and sell it today you would earn a total of 33,000 from holding Jinro Distillers Co or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chilsung Beverage vs. Jinro Distillers Co
Performance |
| Timeline |
| Lotte Chilsung Beverage |
| Jinro Distillers |
Lotte Chilsung and Jinro Distillers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chilsung and Jinro Distillers
The main advantage of trading using opposite Lotte Chilsung and Jinro Distillers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chilsung position performs unexpectedly, Jinro Distillers 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 Jinro Distillers will offset losses from the drop in Jinro Distillers' long position.| Lotte Chilsung vs. Busan Industrial Co | Lotte Chilsung vs. Busan Ind | Lotte Chilsung vs. RPBio Inc | Lotte Chilsung vs. Finebesteel |
| Jinro Distillers vs. FNSTech Co | Jinro Distillers vs. Daejung Chemicals Metals | Jinro Distillers vs. Heungkuk Metaltech CoLtd | Jinro Distillers vs. Lion Chemtech 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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