Correlation Between Cosmos Technology and Lotte Chemical
Can any of the company-specific risk be diversified away by investing in both Cosmos Technology and Lotte Chemical 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 Cosmos Technology and Lotte Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosmos Technology International and Lotte Chemical Titan, you can compare the effects of market volatilities on Cosmos Technology and Lotte Chemical 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 Cosmos Technology with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos Technology and Lotte Chemical.
Diversification Opportunities for Cosmos Technology and Lotte Chemical
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cosmos and Lotte is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Technology Internationa and Lotte Chemical Titan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chemical Titan and Cosmos Technology 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 Cosmos Technology International are associated (or correlated) with Lotte Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chemical Titan has no effect on the direction of Cosmos Technology i.e., Cosmos Technology and Lotte Chemical go up and down completely randomly.
Pair Corralation between Cosmos Technology and Lotte Chemical
Assuming the 90 days trading horizon Cosmos Technology International is expected to generate 0.94 times more return on investment than Lotte Chemical. However, Cosmos Technology International is 1.06 times less risky than Lotte Chemical. It trades about -0.04 of its potential returns per unit of risk. Lotte Chemical Titan is currently generating about -0.13 per unit of risk. If you would invest 42.00 in Cosmos Technology International on October 26, 2024 and sell it today you would lose (1.00) from holding Cosmos Technology International or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cosmos Technology Internationa vs. Lotte Chemical Titan
Performance |
| Timeline |
| Cosmos Technology |
| Lotte Chemical Titan |
Cosmos Technology and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosmos Technology and Lotte Chemical
The main advantage of trading using opposite Cosmos Technology and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos Technology position performs unexpectedly, Lotte Chemical 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 Chemical will offset losses from the drop in Lotte Chemical's long position.| Cosmos Technology vs. TAS Offshore Bhd | Cosmos Technology vs. Icon Offshore Bhd | Cosmos Technology vs. K One Technology Bhd | Cosmos Technology vs. Supercomnet Technologies Bhd |
| Lotte Chemical vs. Apex Healthcare Bhd | Lotte Chemical vs. TAS Offshore Bhd | Lotte Chemical vs. YX Precious Metals | Lotte Chemical vs. Computer Forms Bhd |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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