Correlation Between Pureun Mutual and Lotte Corp
Can any of the company-specific risk be diversified away by investing in both Pureun Mutual and Lotte Corp 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 Pureun Mutual and Lotte Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pureun Mutual Savings and Lotte Corp, you can compare the effects of market volatilities on Pureun Mutual and Lotte Corp 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 Pureun Mutual with a short position of Lotte Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pureun Mutual and Lotte Corp.
Diversification Opportunities for Pureun Mutual and Lotte Corp
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pureun and Lotte is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Pureun Mutual Savings and Lotte Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Corp and Pureun Mutual 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 Pureun Mutual Savings are associated (or correlated) with Lotte Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Corp has no effect on the direction of Pureun Mutual i.e., Pureun Mutual and Lotte Corp go up and down completely randomly.
Pair Corralation between Pureun Mutual and Lotte Corp
Assuming the 90 days trading horizon Pureun Mutual Savings is expected to generate 0.49 times more return on investment than Lotte Corp. However, Pureun Mutual Savings is 2.02 times less risky than Lotte Corp. It trades about -0.03 of its potential returns per unit of risk. Lotte Corp is currently generating about -0.17 per unit of risk. If you would invest 856,000 in Pureun Mutual Savings on September 12, 2024 and sell it today you would lose (8,000) from holding Pureun Mutual Savings or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Pureun Mutual Savings vs. Lotte Corp
Performance |
| Timeline |
| Pureun Mutual Savings |
| Lotte Corp |
Pureun Mutual and Lotte Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pureun Mutual and Lotte Corp
The main advantage of trading using opposite Pureun Mutual and Lotte Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pureun Mutual position performs unexpectedly, Lotte Corp 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 Lotte Corp will offset losses from the drop in Lotte Corp's long position.| Pureun Mutual vs. KB Financial Group | Pureun Mutual vs. Shinhan Financial Group | Pureun Mutual vs. Hana Financial | Pureun Mutual vs. Woori Financial Group |
| Lotte Corp vs. Hannong Chemicals | Lotte Corp vs. Semyung Electric Machinery | Lotte Corp vs. Hansol Chemical Co | Lotte Corp vs. LG Chemicals |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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