Correlation Between Lotte Chilsung and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both Lotte Chilsung and KMH Hitech 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 KMH Hitech 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 KMH Hitech Co, you can compare the effects of market volatilities on Lotte Chilsung and KMH Hitech 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 KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chilsung and KMH Hitech.
Diversification Opportunities for Lotte Chilsung and KMH Hitech
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lotte and KMH is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chilsung Beverage and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech 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 KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of Lotte Chilsung i.e., Lotte Chilsung and KMH Hitech go up and down completely randomly.
Pair Corralation between Lotte Chilsung and KMH Hitech
Assuming the 90 days trading horizon Lotte Chilsung Beverage is expected to under-perform the KMH Hitech. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Chilsung Beverage is 1.34 times less risky than KMH Hitech. The stock trades about -0.11 of its potential returns per unit of risk. The KMH Hitech Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 105,200 in KMH Hitech Co on October 25, 2024 and sell it today you would lose (7,200) from holding KMH Hitech Co or give up 6.84% 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. KMH Hitech Co
Performance |
| Timeline |
| Lotte Chilsung Beverage |
| KMH Hitech |
Lotte Chilsung and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chilsung and KMH Hitech
The main advantage of trading using opposite Lotte Chilsung and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chilsung position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| Lotte Chilsung vs. Automobile Pc | Lotte Chilsung vs. Daesung Industrial Co | Lotte Chilsung vs. Hyunwoo Industrial Co | Lotte Chilsung vs. Innowireless Co |
| KMH Hitech vs. Samsung Electronics Co | KMH Hitech vs. Samsung Electronics Co | KMH Hitech vs. SK Hynix | KMH Hitech vs. HMM 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |