Correlation Between Global Standard and Lotte Non
Can any of the company-specific risk be diversified away by investing in both Global Standard 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 Global Standard and Lotte Non into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Standard Technology and Lotte Non Life Insurance, you can compare the effects of market volatilities on Global Standard 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 Global Standard with a short position of Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Standard and Lotte Non.
Diversification Opportunities for Global Standard and Lotte Non
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Lotte is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Global Standard Technology 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 Global Standard 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 Global Standard Technology 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 Global Standard i.e., Global Standard and Lotte Non go up and down completely randomly.
Pair Corralation between Global Standard and Lotte Non
Assuming the 90 days trading horizon Global Standard Technology is expected to generate 1.09 times more return on investment than Lotte Non. However, Global Standard is 1.09 times more volatile than Lotte Non Life Insurance. It trades about 0.04 of its potential returns per unit of risk. Lotte Non Life Insurance is currently generating about 0.03 per unit of risk. If you would invest 1,157,508 in Global Standard Technology on November 7, 2024 and sell it today you would earn a total of 532,492 from holding Global Standard Technology or generate 46.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Standard Technology vs. Lotte Non Life Insurance
Performance |
| Timeline |
| Global Standard Tech |
| Lotte Non Life |
Global Standard and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Standard and Lotte Non
The main advantage of trading using opposite Global Standard and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Standard 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.| Global Standard vs. Iljin Display | Global Standard vs. Bookook Steel | Global Standard vs. Finebesteel | Global Standard vs. BooKook Steel Co |
| Lotte Non vs. CU Medical Systems | Lotte Non vs. Haitai Confectionery Foods | Lotte Non vs. Hyundai Green Food | Lotte Non vs. BIT Computer 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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