Correlation Between Korea Shipbuilding and Lotte Chilsung
Can any of the company-specific risk be diversified away by investing in both Korea Shipbuilding 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 Korea Shipbuilding and Lotte Chilsung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Shipbuilding Offshore and Lotte Chilsung Beverage, you can compare the effects of market volatilities on Korea Shipbuilding 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 Korea Shipbuilding with a short position of Lotte Chilsung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Shipbuilding and Lotte Chilsung.
Diversification Opportunities for Korea Shipbuilding and Lotte Chilsung
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korea and Lotte is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Korea Shipbuilding Offshore 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 Korea Shipbuilding 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 Korea Shipbuilding Offshore 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 Korea Shipbuilding i.e., Korea Shipbuilding and Lotte Chilsung go up and down completely randomly.
Pair Corralation between Korea Shipbuilding and Lotte Chilsung
Assuming the 90 days trading horizon Korea Shipbuilding Offshore is expected to generate 1.46 times more return on investment than Lotte Chilsung. However, Korea Shipbuilding is 1.46 times more volatile than Lotte Chilsung Beverage. It trades about 0.1 of its potential returns per unit of risk. Lotte Chilsung Beverage is currently generating about -0.02 per unit of risk. If you would invest 7,380,000 in Korea Shipbuilding Offshore on August 25, 2024 and sell it today you would earn a total of 12,770,000 from holding Korea Shipbuilding Offshore or generate 173.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Shipbuilding Offshore vs. Lotte Chilsung Beverage
Performance |
| Timeline |
| Korea Shipbuilding |
| Lotte Chilsung Beverage |
Korea Shipbuilding and Lotte Chilsung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Shipbuilding and Lotte Chilsung
The main advantage of trading using opposite Korea Shipbuilding and Lotte Chilsung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Shipbuilding 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.| Korea Shipbuilding vs. Lotte Chilsung Beverage | Korea Shipbuilding vs. Hyundai Industrial Co | Korea Shipbuilding vs. Samhwa Paint Industrial | Korea Shipbuilding vs. Seoul Food Industrial |
| Lotte Chilsung vs. AptaBio Therapeutics | Lotte Chilsung vs. Daewoo SBI SPAC | Lotte Chilsung vs. Dream Security co | Lotte Chilsung vs. Microfriend |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |