Correlation Between Lotte Chilsung and MS Autotech
Can any of the company-specific risk be diversified away by investing in both Lotte Chilsung and MS Autotech 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 MS Autotech 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 MS Autotech CoLtd, you can compare the effects of market volatilities on Lotte Chilsung and MS Autotech 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 MS Autotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chilsung and MS Autotech.
Diversification Opportunities for Lotte Chilsung and MS Autotech
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lotte and 123040 is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chilsung Beverage and MS Autotech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MS Autotech 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 MS Autotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MS Autotech CoLtd has no effect on the direction of Lotte Chilsung i.e., Lotte Chilsung and MS Autotech go up and down completely randomly.
Pair Corralation between Lotte Chilsung and MS Autotech
Assuming the 90 days trading horizon Lotte Chilsung Beverage is expected to under-perform the MS Autotech. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Chilsung Beverage is 1.76 times less risky than MS Autotech. The stock trades about -0.36 of its potential returns per unit of risk. The MS Autotech CoLtd is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 252,500 in MS Autotech CoLtd on October 25, 2024 and sell it today you would lose (3,000) from holding MS Autotech CoLtd or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chilsung Beverage vs. MS Autotech CoLtd
Performance |
| Timeline |
| Lotte Chilsung Beverage |
| MS Autotech CoLtd |
Lotte Chilsung and MS Autotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chilsung and MS Autotech
The main advantage of trading using opposite Lotte Chilsung and MS Autotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chilsung position performs unexpectedly, MS Autotech 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 MS Autotech will offset losses from the drop in MS Autotech'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 |
| MS Autotech vs. Samsung Electronics Co | MS Autotech vs. Samsung Electronics Co | MS Autotech vs. KB Financial Group | MS Autotech vs. Shinhan Financial Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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