Correlation Between Lotte Rental and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Lotte Rental and Samsung Electronics 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 Lotte Rental and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Rental Co and Samsung Electronics Co, you can compare the effects of market volatilities on Lotte Rental and Samsung Electronics 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 Lotte Rental with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Rental and Samsung Electronics.
Diversification Opportunities for Lotte Rental and Samsung Electronics
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Samsung is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Rental Co and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Lotte Rental 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 Lotte Rental Co are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Lotte Rental i.e., Lotte Rental and Samsung Electronics go up and down completely randomly.
Pair Corralation between Lotte Rental and Samsung Electronics
Assuming the 90 days trading horizon Lotte Rental Co is expected to generate 0.91 times more return on investment than Samsung Electronics. However, Lotte Rental Co is 1.1 times less risky than Samsung Electronics. It trades about 0.02 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.01 per unit of risk. If you would invest 2,660,000 in Lotte Rental Co on October 12, 2024 and sell it today you would earn a total of 265,000 from holding Lotte Rental Co or generate 9.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Rental Co vs. Samsung Electronics Co
Performance |
| Timeline |
| Lotte Rental |
| Samsung Electronics |
Lotte Rental and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Rental and Samsung Electronics
The main advantage of trading using opposite Lotte Rental and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Rental position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Lotte Rental vs. Samsung Electronics Co | Lotte Rental vs. Samsung Electronics Co | Lotte Rental vs. LG Energy Solution | Lotte Rental vs. SK Hynix |
| Samsung Electronics vs. LG Corp | Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. Busan Ind | Samsung Electronics vs. UNISEM 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |