Correlation Between InfoBank and Lotte Non
Can any of the company-specific risk be diversified away by investing in both InfoBank and Lotte Non 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 InfoBank and Lotte Non into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfoBank and Lotte Non Life Insurance, you can compare the effects of market volatilities on InfoBank and Lotte Non 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 InfoBank with a short position of Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfoBank and Lotte Non.
Diversification Opportunities for InfoBank and Lotte Non
Average diversification
The 3 months correlation between InfoBank and Lotte is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding InfoBank and Lotte Non Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Non Life and InfoBank 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 InfoBank are associated (or correlated) with Lotte Non. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Non Life has no effect on the direction of InfoBank i.e., InfoBank and Lotte Non go up and down completely randomly.
Pair Corralation between InfoBank and Lotte Non
Assuming the 90 days trading horizon InfoBank is expected to generate 1.12 times more return on investment than Lotte Non. However, InfoBank is 1.12 times more volatile than Lotte Non Life Insurance. It trades about -0.05 of its potential returns per unit of risk. Lotte Non Life Insurance is currently generating about -0.1 per unit of risk. If you would invest 974,000 in InfoBank on September 3, 2024 and sell it today you would lose (290,000) from holding InfoBank or give up 29.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InfoBank vs. Lotte Non Life Insurance
Performance |
| Timeline |
| InfoBank |
| Lotte Non Life |
InfoBank and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfoBank and Lotte Non
The main advantage of trading using opposite InfoBank and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfoBank position performs unexpectedly, Lotte Non 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 Non will offset losses from the drop in Lotte Non's long position.| InfoBank vs. Korea Refract | InfoBank vs. Korea Refractories Co | InfoBank vs. Shinhan Inverse WTI | InfoBank vs. SAMYOUNG M Tek Co |
| Lotte Non vs. Seoyon Topmetal Co | Lotte Non vs. Coloray International Investment | Lotte Non vs. Daejung Chemicals Metals | Lotte Non vs. Daol Investment Securities |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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