Correlation Between Lotte Chilsung and Atinum Investment
Can any of the company-specific risk be diversified away by investing in both Lotte Chilsung and Atinum Investment 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 Atinum Investment 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 Atinum Investment Co, you can compare the effects of market volatilities on Lotte Chilsung and Atinum Investment 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 Atinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chilsung and Atinum Investment.
Diversification Opportunities for Lotte Chilsung and Atinum Investment
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Atinum is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chilsung Beverage and Atinum Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atinum Investment 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 Atinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atinum Investment has no effect on the direction of Lotte Chilsung i.e., Lotte Chilsung and Atinum Investment go up and down completely randomly.
Pair Corralation between Lotte Chilsung and Atinum Investment
Assuming the 90 days trading horizon Lotte Chilsung Beverage is expected to generate 0.64 times more return on investment than Atinum Investment. However, Lotte Chilsung Beverage is 1.56 times less risky than Atinum Investment. It trades about -0.02 of its potential returns per unit of risk. Atinum Investment Co is currently generating about -0.13 per unit of risk. If you would invest 12,200,000 in Lotte Chilsung Beverage on September 1, 2024 and sell it today you would lose (120,000) from holding Lotte Chilsung Beverage or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chilsung Beverage vs. Atinum Investment Co
Performance |
| Timeline |
| Lotte Chilsung Beverage |
| Atinum Investment |
Lotte Chilsung and Atinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chilsung and Atinum Investment
The main advantage of trading using opposite Lotte Chilsung and Atinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chilsung position performs unexpectedly, Atinum Investment 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 Atinum Investment will offset losses from the drop in Atinum Investment's long position.| Lotte Chilsung vs. EV Advanced Material | Lotte Chilsung vs. DAEDUCK ELECTRONICS CoLtd | Lotte Chilsung vs. Hansol Homedeco Co | Lotte Chilsung vs. Hyundai Engineering Plastics |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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