Correlation Between Kukil Metal and Lotte Non
Can any of the company-specific risk be diversified away by investing in both Kukil Metal 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 Kukil Metal and Lotte Non into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukil Metal Co and Lotte Non Life Insurance, you can compare the effects of market volatilities on Kukil Metal 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 Kukil Metal with a short position of Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukil Metal and Lotte Non.
Diversification Opportunities for Kukil Metal and Lotte Non
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kukil and Lotte is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal Co 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 Kukil Metal 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 Kukil Metal Co 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 Kukil Metal i.e., Kukil Metal and Lotte Non go up and down completely randomly.
Pair Corralation between Kukil Metal and Lotte Non
Assuming the 90 days trading horizon Kukil Metal Co is expected to generate 0.6 times more return on investment than Lotte Non. However, Kukil Metal Co is 1.66 times less risky than Lotte Non. It trades about -0.14 of its potential returns per unit of risk. Lotte Non Life Insurance is currently generating about -0.18 per unit of risk. If you would invest 199,000 in Kukil Metal Co on August 28, 2024 and sell it today you would lose (23,500) from holding Kukil Metal Co or give up 11.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukil Metal Co vs. Lotte Non Life Insurance
Performance |
| Timeline |
| Kukil Metal |
| Lotte Non Life |
Kukil Metal and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukil Metal and Lotte Non
The main advantage of trading using opposite Kukil Metal and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukil Metal 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.| Kukil Metal vs. Keum Kang Steel | Kukil Metal vs. Tplex Co | Kukil Metal vs. PJ Metal Co | Kukil Metal vs. Samhyun Steel Co |
| Lotte Non vs. DONGKUK STEEL MILL | Lotte Non vs. J Steel Co | Lotte Non vs. Dongbu Steel Co | Lotte Non vs. GS Retail Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |