Correlation Between Lotte Chilsung and Wonik QnC
Can any of the company-specific risk be diversified away by investing in both Lotte Chilsung and Wonik QnC 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 Wonik QnC 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 Wonik QnC, you can compare the effects of market volatilities on Lotte Chilsung and Wonik QnC 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 Wonik QnC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chilsung and Wonik QnC.
Diversification Opportunities for Lotte Chilsung and Wonik QnC
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotte and Wonik is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chilsung Beverage and Wonik QnC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonik QnC 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 Wonik QnC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonik QnC has no effect on the direction of Lotte Chilsung i.e., Lotte Chilsung and Wonik QnC go up and down completely randomly.
Pair Corralation between Lotte Chilsung and Wonik QnC
Assuming the 90 days trading horizon Lotte Chilsung Beverage is expected to generate 0.6 times more return on investment than Wonik QnC. However, Lotte Chilsung Beverage is 1.66 times less risky than Wonik QnC. It trades about -0.02 of its potential returns per unit of risk. Wonik QnC is currently generating about -0.39 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chilsung Beverage vs. Wonik QnC
Performance |
| Timeline |
| Lotte Chilsung Beverage |
| Wonik QnC |
Lotte Chilsung and Wonik QnC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chilsung and Wonik QnC
The main advantage of trading using opposite Lotte Chilsung and Wonik QnC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chilsung position performs unexpectedly, Wonik QnC 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 Wonik QnC will offset losses from the drop in Wonik QnC'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 |
| Wonik QnC vs. Dongsin Engineering Construction | Wonik QnC vs. Doosan Fuel Cell | Wonik QnC vs. Daishin Balance 1 | Wonik QnC vs. Total Soft Bank |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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