Correlation Between Daiyang Metal and Lotte Chilsung
Can any of the company-specific risk be diversified away by investing in both Daiyang Metal and Lotte Chilsung 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 Daiyang Metal and Lotte Chilsung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daiyang Metal Co and Lotte Chilsung Beverage, you can compare the effects of market volatilities on Daiyang Metal and Lotte Chilsung 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 Daiyang Metal with a short position of Lotte Chilsung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiyang Metal and Lotte Chilsung.
Diversification Opportunities for Daiyang Metal and Lotte Chilsung
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daiyang and Lotte is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Daiyang Metal Co and Lotte Chilsung Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chilsung Beverage and Daiyang Metal 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 Daiyang Metal Co are associated (or correlated) with Lotte Chilsung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chilsung Beverage has no effect on the direction of Daiyang Metal i.e., Daiyang Metal and Lotte Chilsung go up and down completely randomly.
Pair Corralation between Daiyang Metal and Lotte Chilsung
Assuming the 90 days trading horizon Daiyang Metal Co is expected to generate 3.05 times more return on investment than Lotte Chilsung. However, Daiyang Metal is 3.05 times more volatile than Lotte Chilsung Beverage. It trades about -0.01 of its potential returns per unit of risk. Lotte Chilsung Beverage is currently generating about -0.03 per unit of risk. If you would invest 335,000 in Daiyang Metal Co on September 2, 2024 and sell it today you would lose (188,100) from holding Daiyang Metal Co or give up 56.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.97% |
| Values | Daily Returns |
Daiyang Metal Co vs. Lotte Chilsung Beverage
Performance |
| Timeline |
| Daiyang Metal |
| Lotte Chilsung Beverage |
Daiyang Metal and Lotte Chilsung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daiyang Metal and Lotte Chilsung
The main advantage of trading using opposite Daiyang Metal and Lotte Chilsung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiyang Metal position performs unexpectedly, Lotte Chilsung 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 Chilsung will offset losses from the drop in Lotte Chilsung's long position.| Daiyang Metal vs. AptaBio Therapeutics | Daiyang Metal vs. Daewoo SBI SPAC | Daiyang Metal vs. Dream Security co | Daiyang Metal vs. Microfriend |
| Lotte Chilsung vs. Korea Real Estate | Lotte Chilsung vs. Korea Ratings Co | Lotte Chilsung vs. IQuest Co | Lotte Chilsung vs. Wonbang Tech Co |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Commodity Directory Find actively traded commodities issued by global exchanges |