Correlation Between Lotte Rental and N Citron
Can any of the company-specific risk be diversified away by investing in both Lotte Rental and N Citron 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 N Citron 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 N Citron, you can compare the effects of market volatilities on Lotte Rental and N Citron 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 N Citron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Rental and N Citron.
Diversification Opportunities for Lotte Rental and N Citron
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and 101400 is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Rental Co and N Citron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Citron 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 N Citron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Citron has no effect on the direction of Lotte Rental i.e., Lotte Rental and N Citron go up and down completely randomly.
Pair Corralation between Lotte Rental and N Citron
Assuming the 90 days trading horizon Lotte Rental Co is expected to generate 0.75 times more return on investment than N Citron. However, Lotte Rental Co is 1.34 times less risky than N Citron. It trades about 0.02 of its potential returns per unit of risk. N Citron is currently generating about -0.08 per unit of risk. If you would invest 2,690,000 in Lotte Rental Co on November 3, 2024 and sell it today you would earn a total of 150,000 from holding Lotte Rental Co or generate 5.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Lotte Rental Co vs. N Citron
Performance |
| Timeline |
| Lotte Rental |
| N Citron |
Lotte Rental and N Citron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Rental and N Citron
The main advantage of trading using opposite Lotte Rental and N Citron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Rental position performs unexpectedly, N Citron 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 N Citron will offset losses from the drop in N Citron'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 |
| N Citron vs. TJ media Co | N Citron vs. Histeel | N Citron vs. ChipsMedia | N Citron vs. Dong A Steel Technology |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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