Correlation Between Lotte Chilsung and Kakao Games
Can any of the company-specific risk be diversified away by investing in both Lotte Chilsung and Kakao 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 Kakao 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 Kakao Games Corp, you can compare the effects of market volatilities on Lotte Chilsung and Kakao 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 Kakao Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Chilsung and Kakao Games.
Diversification Opportunities for Lotte Chilsung and Kakao Games
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lotte and Kakao is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Chilsung Beverage and Kakao Games Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kakao 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 Kakao Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kakao Games Corp has no effect on the direction of Lotte Chilsung i.e., Lotte Chilsung and Kakao Games go up and down completely randomly.
Pair Corralation between Lotte Chilsung and Kakao Games
Assuming the 90 days trading horizon Lotte Chilsung is expected to generate 4.83 times less return on investment than Kakao Games. But when comparing it to its historical volatility, Lotte Chilsung Beverage is 1.38 times less risky than Kakao Games. It trades about 0.01 of its potential returns per unit of risk. Kakao Games Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,692,000 in Kakao Games Corp on August 28, 2024 and sell it today you would earn a total of 11,000 from holding Kakao Games Corp or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Chilsung Beverage vs. Kakao Games Corp
Performance |
| Timeline |
| Lotte Chilsung Beverage |
| Kakao Games Corp |
Lotte Chilsung and Kakao Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Chilsung and Kakao Games
The main advantage of trading using opposite Lotte Chilsung and Kakao Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Chilsung position performs unexpectedly, Kakao 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 Kakao Games will offset losses from the drop in Kakao Games' long position.| Lotte Chilsung vs. AptaBio Therapeutics | Lotte Chilsung vs. Daewoo SBI SPAC | Lotte Chilsung vs. Dream Security co | Lotte Chilsung vs. Microfriend |
| Kakao Games vs. Posco ICT | Kakao Games vs. Devsisters corporation | Kakao Games vs. Nice Information Telecommunication | Kakao Games vs. InfoBank |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |