Correlation Between Lotte Energy and Aprogen Healthcare
Can any of the company-specific risk be diversified away by investing in both Lotte Energy and Aprogen Healthcare 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 Aprogen Healthcare 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 Aprogen Healthcare Games, you can compare the effects of market volatilities on Lotte Energy and Aprogen Healthcare 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 Aprogen Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Energy and Aprogen Healthcare.
Diversification Opportunities for Lotte Energy and Aprogen Healthcare
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lotte and Aprogen is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Energy Materials and Aprogen Healthcare Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aprogen Healthcare Games 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 Aprogen Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aprogen Healthcare Games has no effect on the direction of Lotte Energy i.e., Lotte Energy and Aprogen Healthcare go up and down completely randomly.
Pair Corralation between Lotte Energy and Aprogen Healthcare
Assuming the 90 days trading horizon Lotte Energy Materials is expected to generate 0.91 times more return on investment than Aprogen Healthcare. However, Lotte Energy Materials is 1.1 times less risky than Aprogen Healthcare. It trades about -0.05 of its potential returns per unit of risk. Aprogen Healthcare Games is currently generating about -0.05 per unit of risk. If you would invest 4,260,000 in Lotte Energy Materials on September 4, 2024 and sell it today you would lose (1,810,000) from holding Lotte Energy Materials or give up 42.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Energy Materials vs. Aprogen Healthcare Games
Performance |
| Timeline |
| Lotte Energy Materials |
| Aprogen Healthcare Games |
Lotte Energy and Aprogen Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Energy and Aprogen Healthcare
The main advantage of trading using opposite Lotte Energy and Aprogen Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Energy position performs unexpectedly, Aprogen Healthcare 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 Aprogen Healthcare will offset losses from the drop in Aprogen Healthcare's long position.| Lotte Energy vs. Dongsin Engineering Construction | Lotte Energy vs. Doosan Fuel Cell | Lotte Energy vs. Daishin Balance 1 | Lotte Energy vs. Total Soft Bank |
| Aprogen Healthcare vs. Dongsin Engineering Construction | Aprogen Healthcare vs. Doosan Fuel Cell | Aprogen Healthcare vs. Daishin Balance 1 | Aprogen Healthcare vs. Total Soft Bank |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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