Correlation Between Lotte Rental and Display Tech
Can any of the company-specific risk be diversified away by investing in both Lotte Rental and Display Tech 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 Display Tech 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 Display Tech Co, you can compare the effects of market volatilities on Lotte Rental and Display Tech 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 Display Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Rental and Display Tech.
Diversification Opportunities for Lotte Rental and Display Tech
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Display is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Rental Co and Display Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Display Tech 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 Display Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Display Tech has no effect on the direction of Lotte Rental i.e., Lotte Rental and Display Tech go up and down completely randomly.
Pair Corralation between Lotte Rental and Display Tech
Assuming the 90 days trading horizon Lotte Rental Co is expected to under-perform the Display Tech. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Rental Co is 1.07 times less risky than Display Tech. The stock trades about -0.01 of its potential returns per unit of risk. The Display Tech Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 297,000 in Display Tech Co on October 26, 2024 and sell it today you would earn a total of 9,000 from holding Display Tech Co or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Rental Co vs. Display Tech Co
Performance |
| Timeline |
| Lotte Rental |
| Display Tech |
Lotte Rental and Display Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Rental and Display Tech
The main advantage of trading using opposite Lotte Rental and Display Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Rental position performs unexpectedly, Display Tech 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 Display Tech will offset losses from the drop in Display Tech's 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 |
| Display Tech vs. Daol Investment Securities | Display Tech vs. Lotte Rental Co | Display Tech vs. Sangsangin Investment Securities | Display Tech vs. Korea Investment Holdings |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |