Correlation Between Eagle Veterinary and Lotte Chilsung
Can any of the company-specific risk be diversified away by investing in both Eagle Veterinary and Lotte Chilsung 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 Eagle Veterinary and Lotte Chilsung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Veterinary Technology and Lotte Chilsung Beverage, you can compare the effects of market volatilities on Eagle Veterinary and Lotte Chilsung 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 Eagle Veterinary with a short position of Lotte Chilsung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Veterinary and Lotte Chilsung.
Diversification Opportunities for Eagle Veterinary and Lotte Chilsung
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eagle and Lotte is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Veterinary Technology and Lotte Chilsung Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chilsung Beverage and Eagle Veterinary 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 Eagle Veterinary Technology are associated (or correlated) with Lotte Chilsung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chilsung Beverage has no effect on the direction of Eagle Veterinary i.e., Eagle Veterinary and Lotte Chilsung go up and down completely randomly.
Pair Corralation between Eagle Veterinary and Lotte Chilsung
Assuming the 90 days trading horizon Eagle Veterinary Technology is expected to generate 1.02 times more return on investment than Lotte Chilsung. However, Eagle Veterinary is 1.02 times more volatile than Lotte Chilsung Beverage. It trades about 0.16 of its potential returns per unit of risk. Lotte Chilsung Beverage is currently generating about -0.31 per unit of risk. If you would invest 461,113 in Eagle Veterinary Technology on October 16, 2024 and sell it today you would earn a total of 21,887 from holding Eagle Veterinary Technology or generate 4.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Veterinary Technology vs. Lotte Chilsung Beverage
Performance |
| Timeline |
| Eagle Veterinary Tec |
| Lotte Chilsung Beverage |
Eagle Veterinary and Lotte Chilsung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Veterinary and Lotte Chilsung
The main advantage of trading using opposite Eagle Veterinary and Lotte Chilsung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Veterinary position performs unexpectedly, Lotte Chilsung 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 Chilsung will offset losses from the drop in Lotte Chilsung's long position.| Eagle Veterinary vs. CKH Food Health | Eagle Veterinary vs. Samlip General Foods | Eagle Veterinary vs. Daejung Chemicals Metals | Eagle Veterinary vs. Pyung Hwa Industrial |
| Lotte Chilsung vs. Ssangyong Information Communication | Lotte Chilsung vs. Wireless Power Amplifier | Lotte Chilsung vs. ECSTELECOM Co | Lotte Chilsung vs. Daejung Chemicals Metals |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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