Correlation Between EBEST Investment and Lotte Data
Can any of the company-specific risk be diversified away by investing in both EBEST Investment 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 EBEST Investment and Lotte Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBEST Investment Securities and Lotte Data Communication, you can compare the effects of market volatilities on EBEST Investment 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 EBEST Investment with a short position of Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Lotte Data.
Diversification Opportunities for EBEST Investment and Lotte Data
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EBEST and Lotte is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities 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 EBEST Investment 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 EBEST Investment Securities 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 EBEST Investment i.e., EBEST Investment and Lotte Data go up and down completely randomly.
Pair Corralation between EBEST Investment and Lotte Data
Assuming the 90 days trading horizon EBEST Investment Securities is expected to generate 1.0 times more return on investment than Lotte Data. However, EBEST Investment Securities is 1.0 times less risky than Lotte Data. It trades about 0.01 of its potential returns per unit of risk. Lotte Data Communication is currently generating about 0.0 per unit of risk. If you would invest 400,000 in EBEST Investment Securities on October 22, 2024 and sell it today you would lose (500.00) from holding EBEST Investment Securities or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. Lotte Data Communication
Performance |
| Timeline |
| EBEST Investment Sec |
| Lotte Data Communication |
EBEST Investment and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Lotte Data
The main advantage of trading using opposite EBEST Investment and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment 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.| EBEST Investment vs. TOPMATERIAL LTD | EBEST Investment vs. Cheryong Industrial CoLtd | EBEST Investment vs. Seoyon Topmetal Co | EBEST Investment vs. Union Materials Corp |
| Lotte Data vs. Stic Investments | Lotte Data vs. DB Insurance Co | Lotte Data vs. EBEST Investment Securities | Lotte Data vs. Kbi Metal 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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