Correlation Between Eugene Technology and Lotte Data
Can any of the company-specific risk be diversified away by investing in both Eugene Technology 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 Eugene Technology and Lotte Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eugene Technology CoLtd and Lotte Data Communication, you can compare the effects of market volatilities on Eugene Technology 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 Eugene Technology with a short position of Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eugene Technology and Lotte Data.
Diversification Opportunities for Eugene Technology and Lotte Data
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eugene and Lotte is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Eugene Technology CoLtd 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 Eugene Technology 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 Eugene Technology CoLtd 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 Eugene Technology i.e., Eugene Technology and Lotte Data go up and down completely randomly.
Pair Corralation between Eugene Technology and Lotte Data
Assuming the 90 days trading horizon Eugene Technology is expected to generate 5.49 times less return on investment than Lotte Data. In addition to that, Eugene Technology is 1.61 times more volatile than Lotte Data Communication. It trades about 0.0 of its total potential returns per unit of risk. Lotte Data Communication is currently generating about 0.04 per unit of volatility. If you would invest 1,973,000 in Lotte Data Communication on December 11, 2024 and sell it today you would earn a total of 22,000 from holding Lotte Data Communication or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eugene Technology CoLtd vs. Lotte Data Communication
Performance |
| Timeline |
| Eugene Technology CoLtd |
| Lotte Data Communication |
Eugene Technology and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eugene Technology and Lotte Data
The main advantage of trading using opposite Eugene Technology and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eugene Technology 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.| Eugene Technology vs. Hansol Chemical Co | Eugene Technology vs. Kumho Petro Chemical | Eugene Technology vs. Hannong Chemicals | Eugene Technology vs. Daejung Chemicals Metals |
| Lotte Data vs. Samyoung Electronics Co | Lotte Data vs. Insung Information Co | Lotte Data vs. Sangshin Electronics Co | Lotte Data vs. Wave Electronics 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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