Correlation Between Lotte Energy and Inzi Display
Can any of the company-specific risk be diversified away by investing in both Lotte Energy and Inzi Display 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 Lotte Energy and Inzi Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Energy Materials and Inzi Display CoLtd, you can compare the effects of market volatilities on Lotte Energy and Inzi Display 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 Lotte Energy with a short position of Inzi Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Energy and Inzi Display.
Diversification Opportunities for Lotte Energy and Inzi Display
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lotte and Inzi is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Energy Materials and Inzi Display CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inzi Display CoLtd and Lotte Energy 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 Lotte Energy Materials are associated (or correlated) with Inzi Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inzi Display CoLtd has no effect on the direction of Lotte Energy i.e., Lotte Energy and Inzi Display go up and down completely randomly.
Pair Corralation between Lotte Energy and Inzi Display
Assuming the 90 days trading horizon Lotte Energy Materials is expected to under-perform the Inzi Display. In addition to that, Lotte Energy is 1.99 times more volatile than Inzi Display CoLtd. It trades about -0.54 of its total potential returns per unit of risk. Inzi Display CoLtd is currently generating about -0.34 per unit of volatility. If you would invest 154,700 in Inzi Display CoLtd on August 26, 2024 and sell it today you would lose (15,500) from holding Inzi Display CoLtd or give up 10.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Energy Materials vs. Inzi Display CoLtd
Performance |
| Timeline |
| Lotte Energy Materials |
| Inzi Display CoLtd |
Lotte Energy and Inzi Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Energy and Inzi Display
The main advantage of trading using opposite Lotte Energy and Inzi Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Energy position performs unexpectedly, Inzi Display 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 Inzi Display will offset losses from the drop in Inzi Display's long position.| Lotte Energy vs. Inzi Display CoLtd | Lotte Energy vs. Digital Power Communications | Lotte Energy vs. Lotte Data Communication | Lotte Energy vs. Hankook Furniture Co |
| Inzi Display vs. Sung Bo Chemicals | Inzi Display vs. Kyung In Synthetic Corp | Inzi Display vs. Chin Yang Chemical | Inzi Display vs. LG Chemicals |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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