Correlation Between Ezwelfare and Lotte Data
Can any of the company-specific risk be diversified away by investing in both Ezwelfare and Lotte Data 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 Ezwelfare and Lotte Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ezwelfare Co and Lotte Data Communication, you can compare the effects of market volatilities on Ezwelfare and Lotte Data 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 Ezwelfare with a short position of Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ezwelfare and Lotte Data.
Diversification Opportunities for Ezwelfare and Lotte Data
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ezwelfare and Lotte is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ezwelfare Co and Lotte Data Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Data Communication and Ezwelfare 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 Ezwelfare Co are associated (or correlated) with Lotte Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Data Communication has no effect on the direction of Ezwelfare i.e., Ezwelfare and Lotte Data go up and down completely randomly.
Pair Corralation between Ezwelfare and Lotte Data
Assuming the 90 days trading horizon Ezwelfare Co is expected to generate 1.19 times more return on investment than Lotte Data. However, Ezwelfare is 1.19 times more volatile than Lotte Data Communication. It trades about 0.03 of its potential returns per unit of risk. Lotte Data Communication is currently generating about -0.28 per unit of risk. If you would invest 527,000 in Ezwelfare Co on September 5, 2024 and sell it today you would earn a total of 5,000 from holding Ezwelfare Co or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ezwelfare Co vs. Lotte Data Communication
Performance |
| Timeline |
| Ezwelfare |
| Lotte Data Communication |
Ezwelfare and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ezwelfare and Lotte Data
The main advantage of trading using opposite Ezwelfare and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ezwelfare position performs unexpectedly, Lotte Data 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 Lotte Data will offset losses from the drop in Lotte Data's long position.| Ezwelfare vs. Lotte Data Communication | Ezwelfare vs. Shinsegae Information Communication | Ezwelfare vs. Settlebank | Ezwelfare vs. Dgb Financial |
| Lotte Data vs. Sejong Telecom | Lotte Data vs. Shinsegae Information Communication | Lotte Data vs. Shinil Electronics Co | Lotte Data vs. Samwha Electronics 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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