Correlation Between Lotte Chilsung and DAEYANG ELECTRICCoLtd
Can any of the company-specific risk be diversified away by investing in both Lotte Chilsung and DAEYANG ELECTRICCoLtd 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 DAEYANG ELECTRICCoLtd 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 DAEYANG ELECTRICCoLtd, you can compare the effects of market volatilities on Lotte Chilsung and DAEYANG ELECTRICCoLtd 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 DAEYANG ELECTRICCoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chilsung and DAEYANG ELECTRICCoLtd.
Diversification Opportunities for Lotte Chilsung and DAEYANG ELECTRICCoLtd
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lotte and DAEYANG is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chilsung Beverage and DAEYANG ELECTRICCoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEYANG ELECTRICCoLtd 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 DAEYANG ELECTRICCoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEYANG ELECTRICCoLtd has no effect on the direction of Lotte Chilsung i.e., Lotte Chilsung and DAEYANG ELECTRICCoLtd go up and down completely randomly.
Pair Corralation between Lotte Chilsung and DAEYANG ELECTRICCoLtd
Assuming the 90 days trading horizon Lotte Chilsung Beverage is expected to generate 0.6 times more return on investment than DAEYANG ELECTRICCoLtd. However, Lotte Chilsung Beverage is 1.66 times less risky than DAEYANG ELECTRICCoLtd. It trades about 0.24 of its potential returns per unit of risk. DAEYANG ELECTRICCoLtd is currently generating about -0.04 per unit of risk. If you would invest 10,920,000 in Lotte Chilsung Beverage on September 13, 2024 and sell it today you would earn a total of 1,060,000 from holding Lotte Chilsung Beverage or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lotte Chilsung Beverage vs. DAEYANG ELECTRICCoLtd
Performance |
| Timeline |
| Lotte Chilsung Beverage |
| DAEYANG ELECTRICCoLtd |
Lotte Chilsung and DAEYANG ELECTRICCoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chilsung and DAEYANG ELECTRICCoLtd
The main advantage of trading using opposite Lotte Chilsung and DAEYANG ELECTRICCoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chilsung position performs unexpectedly, DAEYANG ELECTRICCoLtd 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 DAEYANG ELECTRICCoLtd will offset losses from the drop in DAEYANG ELECTRICCoLtd's long position.| Lotte Chilsung vs. Korea New Network | Lotte Chilsung vs. ICD Co | Lotte Chilsung vs. DYPNF CoLtd | Lotte Chilsung vs. Solution Advanced Technology |
| DAEYANG ELECTRICCoLtd vs. Miwon Chemical | DAEYANG ELECTRICCoLtd vs. LAKE MATERIALS LTD | DAEYANG ELECTRICCoLtd vs. Iljin Materials Co | DAEYANG ELECTRICCoLtd vs. WONIK Materials CoLtd |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |