Correlation Between Eagon Industrial and Lotte Reit
Can any of the company-specific risk be diversified away by investing in both Eagon Industrial and Lotte Reit 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 Eagon Industrial and Lotte Reit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagon Industrial Co and Lotte Reit Co, you can compare the effects of market volatilities on Eagon Industrial and Lotte Reit 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 Eagon Industrial with a short position of Lotte Reit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagon Industrial and Lotte Reit.
Diversification Opportunities for Eagon Industrial and Lotte Reit
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eagon and Lotte is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Eagon Industrial Co and Lotte Reit Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Reit and Eagon Industrial 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 Eagon Industrial Co are associated (or correlated) with Lotte Reit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Reit has no effect on the direction of Eagon Industrial i.e., Eagon Industrial and Lotte Reit go up and down completely randomly.
Pair Corralation between Eagon Industrial and Lotte Reit
Assuming the 90 days trading horizon Eagon Industrial Co is expected to under-perform the Lotte Reit. In addition to that, Eagon Industrial is 1.29 times more volatile than Lotte Reit Co. It trades about -0.03 of its total potential returns per unit of risk. Lotte Reit Co is currently generating about -0.02 per unit of volatility. If you would invest 368,816 in Lotte Reit Co on September 14, 2024 and sell it today you would lose (52,316) from holding Lotte Reit Co or give up 14.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Eagon Industrial Co vs. Lotte Reit Co
Performance |
| Timeline |
| Eagon Industrial |
| Lotte Reit |
Eagon Industrial and Lotte Reit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagon Industrial and Lotte Reit
The main advantage of trading using opposite Eagon Industrial and Lotte Reit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagon Industrial position performs unexpectedly, Lotte Reit 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 Reit will offset losses from the drop in Lotte Reit's long position.| Eagon Industrial vs. Samsung Electronics Co | Eagon Industrial vs. Samsung Electronics Co | Eagon Industrial vs. SK Hynix | Eagon Industrial vs. POSCO Holdings |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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