Correlation Between SCI Information and Lotte Data
Can any of the company-specific risk be diversified away by investing in both SCI Information 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 SCI Information and Lotte Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCI Information Service and Lotte Data Communication, you can compare the effects of market volatilities on SCI Information 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 SCI Information with a short position of Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCI Information and Lotte Data.
Diversification Opportunities for SCI Information and Lotte Data
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SCI and Lotte is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding SCI Information Service 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 SCI Information 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 SCI Information Service 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 SCI Information i.e., SCI Information and Lotte Data go up and down completely randomly.
Pair Corralation between SCI Information and Lotte Data
Assuming the 90 days trading horizon SCI Information Service is expected to under-perform the Lotte Data. But the stock apears to be less risky and, when comparing its historical volatility, SCI Information Service is 1.25 times less risky than Lotte Data. The stock trades about -0.26 of its potential returns per unit of risk. The Lotte Data Communication is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,940,000 in Lotte Data Communication on November 3, 2024 and sell it today you would earn a total of 14,000 from holding Lotte Data Communication or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCI Information Service vs. Lotte Data Communication
Performance |
| Timeline |
| SCI Information Service |
| Lotte Data Communication |
SCI Information and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCI Information and Lotte Data
The main advantage of trading using opposite SCI Information and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Information 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.| SCI Information vs. Samlip General Foods | SCI Information vs. FoodNamoo | SCI Information vs. Organic Special Pet | SCI Information vs. Hyundai Green Food |
| Lotte Data vs. GS Engineering Construction | Lotte Data vs. Keyang Electric Machinery | Lotte Data vs. Nable Communications | Lotte Data vs. Seohee Construction Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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