Correlation Between Semyung Electric and Lotte Data
Can any of the company-specific risk be diversified away by investing in both Semyung Electric and Lotte Data 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 Semyung Electric and Lotte Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semyung Electric Machinery and Lotte Data Communication, you can compare the effects of market volatilities on Semyung Electric and Lotte Data 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 Semyung Electric with a short position of Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semyung Electric and Lotte Data.
Diversification Opportunities for Semyung Electric and Lotte Data
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Semyung and Lotte is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Semyung Electric Machinery and Lotte Data Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Data Communication and Semyung Electric 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 Semyung Electric Machinery are associated (or correlated) with Lotte Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Data Communication has no effect on the direction of Semyung Electric i.e., Semyung Electric and Lotte Data go up and down completely randomly.
Pair Corralation between Semyung Electric and Lotte Data
Assuming the 90 days trading horizon Semyung Electric Machinery is expected to under-perform the Lotte Data. In addition to that, Semyung Electric is 2.22 times more volatile than Lotte Data Communication. It trades about 0.0 of its total potential returns per unit of risk. Lotte Data Communication is currently generating about 0.24 per unit of volatility. If you would invest 1,954,000 in Lotte Data Communication on November 28, 2024 and sell it today you would earn a total of 106,000 from holding Lotte Data Communication or generate 5.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Semyung Electric Machinery vs. Lotte Data Communication
Performance |
| Timeline |
| Semyung Electric Mac |
| Lotte Data Communication |
Semyung Electric and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semyung Electric and Lotte Data
The main advantage of trading using opposite Semyung Electric and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semyung Electric position performs unexpectedly, Lotte Data 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 Data will offset losses from the drop in Lotte Data's long position.| Semyung Electric vs. Lotte Fine Chemical | Semyung Electric vs. Echomarketing CoLtd | Semyung Electric vs. Kukdo Chemical Co | Semyung Electric vs. SK Chemicals Co |
| Lotte Data vs. Sangsin Energy Display | Lotte Data vs. Playgram Co | Lotte Data vs. Innowireless Co | Lotte Data vs. Daejung Chemicals Metals |
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 Correlations module to find global opportunities by holding instruments from different markets.
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