Correlation Between Koryo Credit and Lotte Data
Can any of the company-specific risk be diversified away by investing in both Koryo Credit 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 Koryo Credit and Lotte Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koryo Credit Information and Lotte Data Communication, you can compare the effects of market volatilities on Koryo Credit 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 Koryo Credit with a short position of Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koryo Credit and Lotte Data.
Diversification Opportunities for Koryo Credit and Lotte Data
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Koryo and Lotte is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Koryo Credit Information 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 Koryo Credit 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 Koryo Credit Information 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 Koryo Credit i.e., Koryo Credit and Lotte Data go up and down completely randomly.
Pair Corralation between Koryo Credit and Lotte Data
Assuming the 90 days trading horizon Koryo Credit Information is expected to generate 0.48 times more return on investment than Lotte Data. However, Koryo Credit Information is 2.08 times less risky than Lotte Data. It trades about 0.05 of its potential returns per unit of risk. Lotte Data Communication is currently generating about -0.19 per unit of risk. If you would invest 989,000 in Koryo Credit Information on August 29, 2024 and sell it today you would earn a total of 13,000 from holding Koryo Credit Information or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koryo Credit Information vs. Lotte Data Communication
Performance |
| Timeline |
| Koryo Credit Information |
| Lotte Data Communication |
Koryo Credit and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koryo Credit and Lotte Data
The main advantage of trading using opposite Koryo Credit and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koryo Credit 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.| Koryo Credit vs. Eagle Veterinary Technology | Koryo Credit vs. Daou Technology | Koryo Credit vs. NewFlex Technology Co | Koryo Credit vs. Puloon Technology |
| Lotte Data vs. SK Holdings Co | Lotte Data vs. Daou Tech | Lotte Data vs. KT Corporation | Lotte Data vs. Samsung Heavy Industries |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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