Correlation Between Automobile and Lotte Chilsung
Can any of the company-specific risk be diversified away by investing in both Automobile 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 Automobile and Lotte Chilsung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automobile Pc and Lotte Chilsung Beverage, you can compare the effects of market volatilities on Automobile 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 Automobile with a short position of Lotte Chilsung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automobile and Lotte Chilsung.
Diversification Opportunities for Automobile and Lotte Chilsung
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Automobile and Lotte is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Automobile Pc 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 Automobile 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 Automobile Pc 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 Automobile i.e., Automobile and Lotte Chilsung go up and down completely randomly.
Pair Corralation between Automobile and Lotte Chilsung
Assuming the 90 days trading horizon Automobile Pc is expected to generate 2.6 times more return on investment than Lotte Chilsung. However, Automobile is 2.6 times more volatile than Lotte Chilsung Beverage. It trades about 0.0 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 69,300 in Automobile Pc on September 1, 2024 and sell it today you would lose (1,300) from holding Automobile Pc or give up 1.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automobile Pc vs. Lotte Chilsung Beverage
Performance |
| Timeline |
| Automobile Pc |
| Lotte Chilsung Beverage |
Automobile and Lotte Chilsung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automobile and Lotte Chilsung
The main advantage of trading using opposite Automobile and Lotte Chilsung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automobile 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.| Automobile vs. Miwon Chemical | Automobile vs. Sung Bo Chemicals | Automobile vs. Chin Yang Chemical | Automobile vs. Daehan Synthetic Fiber |
| Lotte Chilsung vs. EV Advanced Material | Lotte Chilsung vs. DAEDUCK ELECTRONICS CoLtd | Lotte Chilsung vs. Hansol Homedeco Co | Lotte Chilsung vs. Hyundai Engineering Plastics |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |