Correlation Between Lotte Rental and Wireless Power
Can any of the company-specific risk be diversified away by investing in both Lotte Rental and Wireless Power 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 Wireless Power 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 Wireless Power Amplifier, you can compare the effects of market volatilities on Lotte Rental and Wireless Power 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 Wireless Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Rental and Wireless Power.
Diversification Opportunities for Lotte Rental and Wireless Power
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Wireless is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Rental Co and Wireless Power Amplifier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Power Amplifier 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 Wireless Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Power Amplifier has no effect on the direction of Lotte Rental i.e., Lotte Rental and Wireless Power go up and down completely randomly.
Pair Corralation between Lotte Rental and Wireless Power
Assuming the 90 days trading horizon Lotte Rental Co is expected to under-perform the Wireless Power. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Rental Co is 6.19 times less risky than Wireless Power. The stock trades about -0.14 of its potential returns per unit of risk. The Wireless Power Amplifier is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 295,500 in Wireless Power Amplifier on November 3, 2024 and sell it today you would earn a total of 178,500 from holding Wireless Power Amplifier or generate 60.41% 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. Wireless Power Amplifier
Performance |
| Timeline |
| Lotte Rental |
| Wireless Power Amplifier |
Lotte Rental and Wireless Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Rental and Wireless Power
The main advantage of trading using opposite Lotte Rental and Wireless Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Rental position performs unexpectedly, Wireless Power 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 Wireless Power will offset losses from the drop in Wireless Power'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 |
| Wireless Power vs. Golden Bridge Investment | Wireless Power vs. Korea Investment Holdings | Wireless Power vs. Ssangyong Information Communication | Wireless Power vs. Nable Communications |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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