Correlation Between Lotte Rental and Korea Information
Can any of the company-specific risk be diversified away by investing in both Lotte Rental and Korea Information 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 Korea Information 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 Korea Information Engineering, you can compare the effects of market volatilities on Lotte Rental and Korea Information 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 Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Rental and Korea Information.
Diversification Opportunities for Lotte Rental and Korea Information
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Korea is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Rental Co and Korea Information Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Lotte Rental i.e., Lotte Rental and Korea Information go up and down completely randomly.
Pair Corralation between Lotte Rental and Korea Information
Assuming the 90 days trading horizon Lotte Rental Co is expected to under-perform the Korea Information. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Rental Co is 1.37 times less risky than Korea Information. The stock trades about -0.14 of its potential returns per unit of risk. The Korea Information Engineering is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 251,000 in Korea Information Engineering on November 3, 2024 and sell it today you would earn a total of 7,000 from holding Korea Information Engineering or generate 2.79% 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. Korea Information Engineering
Performance |
| Timeline |
| Lotte Rental |
| Korea Information |
Lotte Rental and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Rental and Korea Information
The main advantage of trading using opposite Lotte Rental and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Rental position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.| Lotte Rental vs. Lotte Non Life Insurance | Lotte Rental vs. DB Financial Investment | Lotte Rental vs. Tway Air Co | Lotte Rental vs. Samsung Life Insurance |
| Korea Information vs. BIT Computer Co | Korea Information vs. Daesung Hi Tech Co | Korea Information vs. Dongil Metal Co | Korea Information vs. Display Tech 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |