Correlation Between Lotte Chilsung and Eugene Technology
Can any of the company-specific risk be diversified away by investing in both Lotte Chilsung and Eugene Technology 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 Eugene Technology 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 Eugene Technology CoLtd, you can compare the effects of market volatilities on Lotte Chilsung and Eugene Technology 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 Eugene Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chilsung and Eugene Technology.
Diversification Opportunities for Lotte Chilsung and Eugene Technology
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Eugene is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chilsung Beverage and Eugene Technology CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eugene Technology CoLtd 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 Eugene Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eugene Technology CoLtd has no effect on the direction of Lotte Chilsung i.e., Lotte Chilsung and Eugene Technology go up and down completely randomly.
Pair Corralation between Lotte Chilsung and Eugene Technology
Assuming the 90 days trading horizon Lotte Chilsung Beverage is expected to under-perform the Eugene Technology. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Chilsung Beverage is 2.12 times less risky than Eugene Technology. The stock trades about -0.21 of its potential returns per unit of risk. The Eugene Technology CoLtd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,585,000 in Eugene Technology CoLtd on October 26, 2024 and sell it today you would earn a total of 360,000 from holding Eugene Technology CoLtd or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chilsung Beverage vs. Eugene Technology CoLtd
Performance |
| Timeline |
| Lotte Chilsung Beverage |
| Eugene Technology CoLtd |
Lotte Chilsung and Eugene Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chilsung and Eugene Technology
The main advantage of trading using opposite Lotte Chilsung and Eugene Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chilsung position performs unexpectedly, Eugene Technology 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 Eugene Technology will offset losses from the drop in Eugene Technology's long position.| Lotte Chilsung vs. Busan Industrial Co | Lotte Chilsung vs. Busan Ind | Lotte Chilsung vs. RPBio Inc | Lotte Chilsung vs. Finebesteel |
| Eugene Technology vs. Songwon Industrial Co | Eugene Technology vs. Kbi Metal Co | Eugene Technology vs. Jeju Beer Co | Eugene Technology vs. Lotte Chilsung Beverage |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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