Correlation Between Kisan Telecom and Lotte Data
Can any of the company-specific risk be diversified away by investing in both Kisan Telecom 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 Kisan Telecom and Lotte Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kisan Telecom Co and Lotte Data Communication, you can compare the effects of market volatilities on Kisan Telecom 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 Kisan Telecom with a short position of Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kisan Telecom and Lotte Data.
Diversification Opportunities for Kisan Telecom and Lotte Data
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kisan and Lotte is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Kisan Telecom 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 Kisan Telecom 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 Kisan Telecom 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 Kisan Telecom i.e., Kisan Telecom and Lotte Data go up and down completely randomly.
Pair Corralation between Kisan Telecom and Lotte Data
Assuming the 90 days trading horizon Kisan Telecom Co is expected to generate 0.53 times more return on investment than Lotte Data. However, Kisan Telecom Co is 1.9 times less risky than Lotte Data. It trades about 0.15 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 175,800 in Kisan Telecom Co on November 3, 2024 and sell it today you would earn a total of 4,600 from holding Kisan Telecom Co or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kisan Telecom Co vs. Lotte Data Communication
Performance |
| Timeline |
| Kisan Telecom |
| Lotte Data Communication |
Kisan Telecom and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kisan Telecom and Lotte Data
The main advantage of trading using opposite Kisan Telecom and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kisan Telecom 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.| Kisan Telecom vs. Daejoo Electronic Materials | Kisan Telecom vs. PJ Electronics Co | Kisan Telecom vs. Korea Electronic Certification | Kisan Telecom vs. BGF Retail Co |
| Lotte Data vs. Daishin Information Communications | Lotte Data vs. Nable Communications | Lotte Data vs. Korea Information Communications | Lotte Data vs. Coloray International Investment |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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