Correlation Between Stic Investments and Lotte Data
Can any of the company-specific risk be diversified away by investing in both Stic Investments 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 Stic Investments and Lotte Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stic Investments and Lotte Data Communication, you can compare the effects of market volatilities on Stic Investments 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 Stic Investments with a short position of Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stic Investments and Lotte Data.
Diversification Opportunities for Stic Investments and Lotte Data
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stic and Lotte is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments 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 Stic Investments 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 Stic Investments 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 Stic Investments i.e., Stic Investments and Lotte Data go up and down completely randomly.
Pair Corralation between Stic Investments and Lotte Data
Assuming the 90 days trading horizon Stic Investments is expected to generate 0.75 times more return on investment than Lotte Data. However, Stic Investments is 1.33 times less risky than Lotte Data. It trades about 0.44 of its potential returns per unit of risk. Lotte Data Communication is currently generating about 0.03 per unit of risk. If you would invest 715,000 in Stic Investments on September 14, 2024 and sell it today you would earn a total of 148,000 from holding Stic Investments or generate 20.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stic Investments vs. Lotte Data Communication
Performance |
| Timeline |
| Stic Investments |
| Lotte Data Communication |
Stic Investments and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stic Investments and Lotte Data
The main advantage of trading using opposite Stic Investments and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments 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.| Stic Investments vs. Cube Entertainment | Stic Investments vs. Dreamus Company | Stic Investments vs. LG Energy Solution | Stic Investments vs. Dongwon System |
| Lotte Data vs. SK Holdings Co | Lotte Data vs. Solution Advanced Technology | Lotte Data vs. Busan Industrial Co | Lotte Data vs. Busan Ind |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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