Correlation Between Jeju Semiconductor and Lotte Non
Can any of the company-specific risk be diversified away by investing in both Jeju Semiconductor 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 Jeju Semiconductor and Lotte Non into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Semiconductor Corp and Lotte Non Life Insurance, you can compare the effects of market volatilities on Jeju Semiconductor 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 Jeju Semiconductor with a short position of Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Semiconductor and Lotte Non.
Diversification Opportunities for Jeju Semiconductor and Lotte Non
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jeju and Lotte is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Semiconductor Corp 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 Jeju Semiconductor 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 Jeju Semiconductor Corp 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 Jeju Semiconductor i.e., Jeju Semiconductor and Lotte Non go up and down completely randomly.
Pair Corralation between Jeju Semiconductor and Lotte Non
Assuming the 90 days trading horizon Jeju Semiconductor Corp is expected to generate 5.51 times more return on investment than Lotte Non. However, Jeju Semiconductor is 5.51 times more volatile than Lotte Non Life Insurance. It trades about 0.32 of its potential returns per unit of risk. Lotte Non Life Insurance is currently generating about -0.07 per unit of risk. If you would invest 892,000 in Jeju Semiconductor Corp on October 30, 2024 and sell it today you would earn a total of 428,000 from holding Jeju Semiconductor Corp or generate 47.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Semiconductor Corp vs. Lotte Non Life Insurance
Performance |
| Timeline |
| Jeju Semiconductor Corp |
| Lotte Non Life |
Jeju Semiconductor and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Semiconductor and Lotte Non
The main advantage of trading using opposite Jeju Semiconductor and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Semiconductor 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.| Jeju Semiconductor vs. TOPMATERIAL LTD | Jeju Semiconductor vs. Kolon Plastics | Jeju Semiconductor vs. Ecoplastic | Jeju Semiconductor vs. National Plastic Co |
| Lotte Non vs. Insung Information Co | Lotte Non vs. Nice Information Telecommunication | Lotte Non vs. Lotte Data Communication | Lotte Non vs. Alton Sports CoLtd |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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