Correlation Between TJ Media and Lotte Data
Can any of the company-specific risk be diversified away by investing in both TJ Media 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 TJ Media and Lotte Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TJ media Co and Lotte Data Communication, you can compare the effects of market volatilities on TJ Media 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 TJ Media with a short position of Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of TJ Media and Lotte Data.
Diversification Opportunities for TJ Media and Lotte Data
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 032540 and Lotte is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding TJ media Co 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 TJ Media 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 TJ media Co 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 TJ Media i.e., TJ Media and Lotte Data go up and down completely randomly.
Pair Corralation between TJ Media and Lotte Data
Assuming the 90 days trading horizon TJ media Co is expected to generate 0.34 times more return on investment than Lotte Data. However, TJ media Co is 2.92 times less risky than Lotte Data. It trades about -0.59 of its potential returns per unit of risk. Lotte Data Communication is currently generating about -0.25 per unit of risk. If you would invest 517,000 in TJ media Co on September 4, 2024 and sell it today you would lose (58,000) from holding TJ media Co or give up 11.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TJ media Co vs. Lotte Data Communication
Performance |
| Timeline |
| TJ media |
| Lotte Data Communication |
TJ Media and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TJ Media and Lotte Data
The main advantage of trading using opposite TJ Media and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TJ Media 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.| TJ Media vs. Lotte Data Communication | TJ Media vs. Automobile Pc | TJ Media vs. Daishin Information Communications | TJ Media vs. Sewoon Medical Co |
| Lotte Data vs. SK Holdings Co | Lotte Data vs. ASTORY CoLtd | Lotte Data vs. Industrial Bank | Lotte Data vs. AnterogenCoLtd |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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