Correlation Between Lotte Chilsung and Netmarble Games
Can any of the company-specific risk be diversified away by investing in both Lotte Chilsung and Netmarble Games 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 Netmarble Games 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 Netmarble Games Corp, you can compare the effects of market volatilities on Lotte Chilsung and Netmarble Games 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 Netmarble Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chilsung and Netmarble Games.
Diversification Opportunities for Lotte Chilsung and Netmarble Games
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotte and Netmarble is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chilsung Beverage and Netmarble Games Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netmarble Games Corp 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 Netmarble Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netmarble Games Corp has no effect on the direction of Lotte Chilsung i.e., Lotte Chilsung and Netmarble Games go up and down completely randomly.
Pair Corralation between Lotte Chilsung and Netmarble Games
Assuming the 90 days trading horizon Lotte Chilsung Beverage is expected to generate 0.56 times more return on investment than Netmarble Games. However, Lotte Chilsung Beverage is 1.78 times less risky than Netmarble Games. It trades about -0.13 of its potential returns per unit of risk. Netmarble Games Corp is currently generating about -0.07 per unit of risk. If you would invest 13,300,000 in Lotte Chilsung Beverage on August 28, 2024 and sell it today you would lose (1,480,000) from holding Lotte Chilsung Beverage or give up 11.13% 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. Netmarble Games Corp
Performance |
| Timeline |
| Lotte Chilsung Beverage |
| Netmarble Games Corp |
Lotte Chilsung and Netmarble Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chilsung and Netmarble Games
The main advantage of trading using opposite Lotte Chilsung and Netmarble Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chilsung position performs unexpectedly, Netmarble Games 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 Netmarble Games will offset losses from the drop in Netmarble Games' long position.| Lotte Chilsung vs. AptaBio Therapeutics | Lotte Chilsung vs. Daewoo SBI SPAC | Lotte Chilsung vs. Dream Security co | Lotte Chilsung vs. Microfriend |
| Netmarble Games vs. AfreecaTV Co | Netmarble Games vs. SS TECH | Netmarble Games vs. Busan Industrial Co | Netmarble Games vs. Busan Ind |
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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