Correlation Between Lotte Chilsung and Osang Healthcare
Can any of the company-specific risk be diversified away by investing in both Lotte Chilsung and Osang Healthcare 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 Osang Healthcare 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 Osang Healthcare Co,Ltd, you can compare the effects of market volatilities on Lotte Chilsung and Osang Healthcare 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 Osang Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chilsung and Osang Healthcare.
Diversification Opportunities for Lotte Chilsung and Osang Healthcare
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotte and Osang is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chilsung Beverage and Osang Healthcare Co,Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osang Healthcare Co,Ltd 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 Osang Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osang Healthcare Co,Ltd has no effect on the direction of Lotte Chilsung i.e., Lotte Chilsung and Osang Healthcare go up and down completely randomly.
Pair Corralation between Lotte Chilsung and Osang Healthcare
Assuming the 90 days trading horizon Lotte Chilsung Beverage is expected to generate 0.44 times more return on investment than Osang Healthcare. However, Lotte Chilsung Beverage is 2.27 times less risky than Osang Healthcare. It trades about -0.03 of its potential returns per unit of risk. Osang Healthcare Co,Ltd is currently generating about -0.12 per unit of risk. If you would invest 15,959,300 in Lotte Chilsung Beverage on August 29, 2024 and sell it today you would lose (4,059,300) from holding Lotte Chilsung Beverage or give up 25.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 35.89% |
| Values | Daily Returns |
Lotte Chilsung Beverage vs. Osang Healthcare Co,Ltd
Performance |
| Timeline |
| Lotte Chilsung Beverage |
| Osang Healthcare Co,Ltd |
Lotte Chilsung and Osang Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chilsung and Osang Healthcare
The main advantage of trading using opposite Lotte Chilsung and Osang Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chilsung position performs unexpectedly, Osang Healthcare 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 Osang Healthcare will offset losses from the drop in Osang Healthcare's long position.| Lotte Chilsung vs. Stic Investments | Lotte Chilsung vs. Heungkuk Metaltech CoLtd | Lotte Chilsung vs. Pureun Mutual Savings | Lotte Chilsung vs. Dongbang Transport Logistics |
| Osang Healthcare vs. Samsung Electronics Co | Osang Healthcare vs. Samsung Electronics Co | Osang Healthcare vs. LG Energy Solution | Osang Healthcare vs. SK Hynix |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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