Correlation Between Lotte Chilsung and I-Scream Edu
Can any of the company-specific risk be diversified away by investing in both Lotte Chilsung and I-Scream Edu 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 I-Scream Edu 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 I Scream Edu CoLtd, you can compare the effects of market volatilities on Lotte Chilsung and I-Scream Edu 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 I-Scream Edu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chilsung and I-Scream Edu.
Diversification Opportunities for Lotte Chilsung and I-Scream Edu
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotte and I-Scream is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chilsung Beverage and I Scream Edu CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Scream Edu 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 I-Scream Edu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Scream Edu has no effect on the direction of Lotte Chilsung i.e., Lotte Chilsung and I-Scream Edu go up and down completely randomly.
Pair Corralation between Lotte Chilsung and I-Scream Edu
Assuming the 90 days trading horizon Lotte Chilsung is expected to generate 1.43 times less return on investment than I-Scream Edu. But when comparing it to its historical volatility, Lotte Chilsung Beverage is 1.88 times less risky than I-Scream Edu. It trades about 0.15 of its potential returns per unit of risk. I Scream Edu CoLtd is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 248,000 in I Scream Edu CoLtd on September 12, 2024 and sell it today you would earn a total of 20,500 from holding I Scream Edu CoLtd or generate 8.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chilsung Beverage vs. I Scream Edu CoLtd
Performance |
| Timeline |
| Lotte Chilsung Beverage |
| I Scream Edu |
Lotte Chilsung and I-Scream Edu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chilsung and I-Scream Edu
The main advantage of trading using opposite Lotte Chilsung and I-Scream Edu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chilsung position performs unexpectedly, I-Scream Edu 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 I-Scream Edu will offset losses from the drop in I-Scream Edu's long position.| Lotte Chilsung vs. Samsung Electronics Co | Lotte Chilsung vs. Samsung Electronics Co | Lotte Chilsung vs. LG Energy Solution | Lotte Chilsung vs. SK Hynix |
| I-Scream Edu vs. Wonil Special Steel | I-Scream Edu vs. Hankook Steel Co | I-Scream Edu vs. J Steel Co | I-Scream Edu vs. Hanil Iron Steel |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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