Correlation Between Yura Tech and Lotte Fine
Can any of the company-specific risk be diversified away by investing in both Yura Tech and Lotte Fine 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 Yura Tech and Lotte Fine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yura Tech Co and Lotte Fine Chemical, you can compare the effects of market volatilities on Yura Tech and Lotte Fine 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 Yura Tech with a short position of Lotte Fine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yura Tech and Lotte Fine.
Diversification Opportunities for Yura Tech and Lotte Fine
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Yura and Lotte is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Yura Tech Co and Lotte Fine Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Fine Chemical and Yura Tech 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 Yura Tech Co are associated (or correlated) with Lotte Fine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Fine Chemical has no effect on the direction of Yura Tech i.e., Yura Tech and Lotte Fine go up and down completely randomly.
Pair Corralation between Yura Tech and Lotte Fine
Assuming the 90 days trading horizon Yura Tech Co is expected to generate 1.52 times more return on investment than Lotte Fine. However, Yura Tech is 1.52 times more volatile than Lotte Fine Chemical. It trades about 0.01 of its potential returns per unit of risk. Lotte Fine Chemical is currently generating about -0.02 per unit of risk. If you would invest 737,325 in Yura Tech Co on September 13, 2024 and sell it today you would lose (15,325) from holding Yura Tech Co or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yura Tech Co vs. Lotte Fine Chemical
Performance |
| Timeline |
| Yura Tech |
| Lotte Fine Chemical |
Yura Tech and Lotte Fine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yura Tech and Lotte Fine
The main advantage of trading using opposite Yura Tech and Lotte Fine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yura Tech position performs unexpectedly, Lotte Fine 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 Fine will offset losses from the drop in Lotte Fine's long position.| Yura Tech vs. Daou Data Corp | Yura Tech vs. Solution Advanced Technology | Yura Tech vs. Busan Industrial Co | Yura Tech vs. Busan Ind |
| Lotte Fine vs. LG Chemicals | Lotte Fine vs. POSCO Holdings | Lotte Fine vs. Hanwha Solutions | Lotte Fine vs. Lotte Chemical Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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