Correlation Between Lotte Chilsung and Dongwoon Anatech
Can any of the company-specific risk be diversified away by investing in both Lotte Chilsung and Dongwoon Anatech 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 Dongwoon Anatech 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 Dongwoon Anatech Co, you can compare the effects of market volatilities on Lotte Chilsung and Dongwoon Anatech 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 Dongwoon Anatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chilsung and Dongwoon Anatech.
Diversification Opportunities for Lotte Chilsung and Dongwoon Anatech
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Dongwoon is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chilsung Beverage and Dongwoon Anatech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoon Anatech 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 Dongwoon Anatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoon Anatech has no effect on the direction of Lotte Chilsung i.e., Lotte Chilsung and Dongwoon Anatech go up and down completely randomly.
Pair Corralation between Lotte Chilsung and Dongwoon Anatech
Assuming the 90 days trading horizon Lotte Chilsung Beverage is expected to under-perform the Dongwoon Anatech. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Chilsung Beverage is 2.91 times less risky than Dongwoon Anatech. The stock trades about -0.39 of its potential returns per unit of risk. The Dongwoon Anatech Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,959,000 in Dongwoon Anatech Co on November 7, 2024 and sell it today you would earn a total of 7,000 from holding Dongwoon Anatech Co or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Lotte Chilsung Beverage vs. Dongwoon Anatech Co
Performance |
| Timeline |
| Lotte Chilsung Beverage |
| Dongwoon Anatech |
Lotte Chilsung and Dongwoon Anatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chilsung and Dongwoon Anatech
The main advantage of trading using opposite Lotte Chilsung and Dongwoon Anatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chilsung position performs unexpectedly, Dongwoon Anatech 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 Dongwoon Anatech will offset losses from the drop in Dongwoon Anatech's long position.| Lotte Chilsung vs. FNSTech Co | Lotte Chilsung vs. PNC Technologies co | Lotte Chilsung vs. Mobile Appliance | Lotte Chilsung vs. Mobileleader CoLtd |
| Dongwoon Anatech vs. SK Hynix | Dongwoon Anatech vs. LX Semicon Co | Dongwoon Anatech vs. Tokai Carbon Korea | Dongwoon Anatech vs. People Technology |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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