Correlation Between Inzi Display and Lotte Energy
Can any of the company-specific risk be diversified away by investing in both Inzi Display and Lotte Energy 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 Inzi Display and Lotte Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inzi Display CoLtd and Lotte Energy Materials, you can compare the effects of market volatilities on Inzi Display and Lotte Energy 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 Inzi Display with a short position of Lotte Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inzi Display and Lotte Energy.
Diversification Opportunities for Inzi Display and Lotte Energy
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Inzi and Lotte is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Inzi Display CoLtd and Lotte Energy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Energy Materials and Inzi Display 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 Inzi Display CoLtd are associated (or correlated) with Lotte Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Energy Materials has no effect on the direction of Inzi Display i.e., Inzi Display and Lotte Energy go up and down completely randomly.
Pair Corralation between Inzi Display and Lotte Energy
Assuming the 90 days trading horizon Inzi Display CoLtd is expected to generate 1.05 times more return on investment than Lotte Energy. However, Inzi Display is 1.05 times more volatile than Lotte Energy Materials. It trades about 0.0 of its potential returns per unit of risk. Lotte Energy Materials is currently generating about -0.04 per unit of risk. If you would invest 168,366 in Inzi Display CoLtd on August 30, 2024 and sell it today you would lose (28,866) from holding Inzi Display CoLtd or give up 17.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inzi Display CoLtd vs. Lotte Energy Materials
Performance |
| Timeline |
| Inzi Display CoLtd |
| Lotte Energy Materials |
Inzi Display and Lotte Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inzi Display and Lotte Energy
The main advantage of trading using opposite Inzi Display and Lotte Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inzi Display position performs unexpectedly, Lotte Energy 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 Energy will offset losses from the drop in Lotte Energy's long position.| Inzi Display vs. Daou Data Corp | Inzi Display vs. Busan Industrial Co | Inzi Display vs. Busan Ind | Inzi Display vs. Shinhan WTI Futures |
| Lotte Energy vs. Daou Data Corp | Lotte Energy vs. Busan Industrial Co | Lotte Energy vs. Busan Ind | Lotte Energy vs. Shinhan WTI Futures |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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