Correlation Between Lotte Rental and TS Investment
Can any of the company-specific risk be diversified away by investing in both Lotte Rental and TS Investment 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 TS Investment 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 TS Investment Corp, you can compare the effects of market volatilities on Lotte Rental and TS Investment 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 TS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Rental and TS Investment.
Diversification Opportunities for Lotte Rental and TS Investment
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lotte and 246690 is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Rental Co and TS Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TS Investment Corp 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 TS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TS Investment Corp has no effect on the direction of Lotte Rental i.e., Lotte Rental and TS Investment go up and down completely randomly.
Pair Corralation between Lotte Rental and TS Investment
Assuming the 90 days trading horizon Lotte Rental Co is expected to under-perform the TS Investment. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Rental Co is 1.73 times less risky than TS Investment. The stock trades about -0.27 of its potential returns per unit of risk. The TS Investment Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 91,400 in TS Investment Corp on October 31, 2024 and sell it today you would earn a total of 5,200 from holding TS Investment Corp or generate 5.69% 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. TS Investment Corp
Performance |
| Timeline |
| Lotte Rental |
| TS Investment Corp |
Lotte Rental and TS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Rental and TS Investment
The main advantage of trading using opposite Lotte Rental and TS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Rental position performs unexpectedly, TS Investment 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 TS Investment will offset losses from the drop in TS Investment's long position.| Lotte Rental vs. Korea Industrial Co | Lotte Rental vs. SH Energy Chemical | Lotte Rental vs. Youl Chon Chemical | Lotte Rental vs. Daesung Industrial Co |
| TS Investment vs. Kukil Metal Co | TS Investment vs. DoubleU Games Co | TS Investment vs. Sangsangin Investment Securities | TS Investment vs. Aprogen Healthcare Games |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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