Correlation Between Lotte Rental and Duksan Hi
Can any of the company-specific risk be diversified away by investing in both Lotte Rental and Duksan Hi 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 Duksan Hi 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 Duksan Hi Metal, you can compare the effects of market volatilities on Lotte Rental and Duksan Hi 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 Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Rental and Duksan Hi.
Diversification Opportunities for Lotte Rental and Duksan Hi
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Duksan is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Rental Co and Duksan Hi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duksan Hi Metal 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 Duksan Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duksan Hi Metal has no effect on the direction of Lotte Rental i.e., Lotte Rental and Duksan Hi go up and down completely randomly.
Pair Corralation between Lotte Rental and Duksan Hi
Assuming the 90 days trading horizon Lotte Rental Co is expected to generate 0.5 times more return on investment than Duksan Hi. However, Lotte Rental Co is 2.0 times less risky than Duksan Hi. It trades about -0.2 of its potential returns per unit of risk. Duksan Hi Metal is currently generating about -0.12 per unit of risk. If you would invest 2,975,000 in Lotte Rental Co on November 8, 2024 and sell it today you would lose (145,000) from holding Lotte Rental Co or give up 4.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Rental Co vs. Duksan Hi Metal
Performance |
| Timeline |
| Lotte Rental |
| Duksan Hi Metal |
Lotte Rental and Duksan Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Rental and Duksan Hi
The main advantage of trading using opposite Lotte Rental and Duksan Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Rental position performs unexpectedly, Duksan Hi 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 Duksan Hi will offset losses from the drop in Duksan Hi's long position.| Lotte Rental vs. KyungIn Electronics Co | Lotte Rental vs. Samji Electronics Co | Lotte Rental vs. GS Retail Co | Lotte Rental vs. Vissem Electronics Co |
| Duksan Hi vs. Daiyang Metal Co | Duksan Hi vs. Daishin Information Communications | Duksan Hi vs. Kukil Metal Co | Duksan Hi vs. DoubleU Games 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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