Correlation Between Mobile Appliance and Lotte Corp
Can any of the company-specific risk be diversified away by investing in both Mobile Appliance and Lotte Corp 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 Mobile Appliance and Lotte Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobile Appliance and Lotte Corp, you can compare the effects of market volatilities on Mobile Appliance and Lotte Corp 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 Mobile Appliance with a short position of Lotte Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobile Appliance and Lotte Corp.
Diversification Opportunities for Mobile Appliance and Lotte Corp
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mobile and Lotte is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Mobile Appliance and Lotte Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Corp and Mobile Appliance 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 Mobile Appliance are associated (or correlated) with Lotte Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Corp has no effect on the direction of Mobile Appliance i.e., Mobile Appliance and Lotte Corp go up and down completely randomly.
Pair Corralation between Mobile Appliance and Lotte Corp
Assuming the 90 days trading horizon Mobile Appliance is expected to generate 2.07 times more return on investment than Lotte Corp. However, Mobile Appliance is 2.07 times more volatile than Lotte Corp. It trades about -0.01 of its potential returns per unit of risk. Lotte Corp is currently generating about -0.05 per unit of risk. If you would invest 319,000 in Mobile Appliance on September 4, 2024 and sell it today you would lose (105,500) from holding Mobile Appliance or give up 33.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mobile Appliance vs. Lotte Corp
Performance |
| Timeline |
| Mobile Appliance |
| Lotte Corp |
Mobile Appliance and Lotte Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobile Appliance and Lotte Corp
The main advantage of trading using opposite Mobile Appliance and Lotte Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile Appliance position performs unexpectedly, Lotte Corp 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 Corp will offset losses from the drop in Lotte Corp's long position.| Mobile Appliance vs. Samsung Electronics Co | Mobile Appliance vs. Samsung Electronics Co | Mobile Appliance vs. LG Energy Solution | Mobile Appliance vs. SK Hynix |
| Lotte Corp vs. TS Investment Corp | Lotte Corp vs. Pureun Mutual Savings | Lotte Corp vs. Samick Musical Instruments | Lotte Corp vs. Nh Investment And |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |