Correlation Between Lotte Energy and STCube
Can any of the company-specific risk be diversified away by investing in both Lotte Energy and STCube 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 STCube 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 STCube Inc, you can compare the effects of market volatilities on Lotte Energy and STCube 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 STCube. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Energy and STCube.
Diversification Opportunities for Lotte Energy and STCube
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lotte and STCube is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Energy Materials and STCube Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STCube Inc 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 STCube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STCube Inc has no effect on the direction of Lotte Energy i.e., Lotte Energy and STCube go up and down completely randomly.
Pair Corralation between Lotte Energy and STCube
Assuming the 90 days trading horizon Lotte Energy Materials is expected to under-perform the STCube. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Energy Materials is 1.58 times less risky than STCube. The stock trades about -0.06 of its potential returns per unit of risk. The STCube Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,283,415 in STCube Inc on September 12, 2024 and sell it today you would lose (783,915) from holding STCube Inc or give up 61.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Energy Materials vs. STCube Inc
Performance |
| Timeline |
| Lotte Energy Materials |
| STCube Inc |
Lotte Energy and STCube Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Energy and STCube
The main advantage of trading using opposite Lotte Energy and STCube positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Energy position performs unexpectedly, STCube 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 STCube will offset losses from the drop in STCube's long position.| Lotte Energy vs. Cube Entertainment | Lotte Energy vs. Dreamus Company | Lotte Energy vs. LG Energy Solution | Lotte Energy vs. Dongwon System |
| STCube vs. Samhyun Steel Co | STCube vs. Lotte Energy Materials | STCube vs. Finebesteel | STCube vs. BooKook Steel Co |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |