Correlation Between Jinro Distillers and Lotte Data
Can any of the company-specific risk be diversified away by investing in both Jinro Distillers 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 Jinro Distillers and Lotte Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jinro Distillers Co and Lotte Data Communication, you can compare the effects of market volatilities on Jinro Distillers 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 Jinro Distillers with a short position of Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinro Distillers and Lotte Data.
Diversification Opportunities for Jinro Distillers and Lotte Data
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jinro and Lotte is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jinro Distillers Co 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 Jinro Distillers 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 Jinro Distillers Co 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 Jinro Distillers i.e., Jinro Distillers and Lotte Data go up and down completely randomly.
Pair Corralation between Jinro Distillers and Lotte Data
Assuming the 90 days trading horizon Jinro Distillers Co is expected to generate 0.22 times more return on investment than Lotte Data. However, Jinro Distillers Co is 4.56 times less risky than Lotte Data. It trades about 0.32 of its potential returns per unit of risk. Lotte Data Communication is currently generating about 0.02 per unit of risk. If you would invest 1,662,670 in Jinro Distillers Co on October 20, 2024 and sell it today you would earn a total of 50,330 from holding Jinro Distillers Co or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinro Distillers Co vs. Lotte Data Communication
Performance |
| Timeline |
| Jinro Distillers |
| Lotte Data Communication |
Jinro Distillers and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinro Distillers and Lotte Data
The main advantage of trading using opposite Jinro Distillers and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinro Distillers 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.| Jinro Distillers vs. LG Household Healthcare | Jinro Distillers vs. Anam Electronics Co | Jinro Distillers vs. Korea Electronic Certification | Jinro Distillers vs. Hana Technology Co |
| Lotte Data vs. Asiana Airlines | Lotte Data vs. Jinro Distillers Co | Lotte Data vs. Inzi Display CoLtd | Lotte Data vs. Samlip General Foods |
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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