Correlation Between Sangsin Energy and Lotte Non
Can any of the company-specific risk be diversified away by investing in both Sangsin Energy and Lotte Non 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 Sangsin Energy and Lotte Non into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sangsin Energy Display and Lotte Non Life, you can compare the effects of market volatilities on Sangsin Energy and Lotte Non 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 Sangsin Energy with a short position of Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsin Energy and Lotte Non.
Diversification Opportunities for Sangsin Energy and Lotte Non
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sangsin and Lotte is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display and Lotte Non Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Non Life and Sangsin Energy 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 Sangsin Energy Display are associated (or correlated) with Lotte Non. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Non Life has no effect on the direction of Sangsin Energy i.e., Sangsin Energy and Lotte Non go up and down completely randomly.
Pair Corralation between Sangsin Energy and Lotte Non
Assuming the 90 days trading horizon Sangsin Energy Display is expected to under-perform the Lotte Non. But the stock apears to be less risky and, when comparing its historical volatility, Sangsin Energy Display is 1.49 times less risky than Lotte Non. The stock trades about -0.1 of its potential returns per unit of risk. The Lotte Non Life is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 244,500 in Lotte Non Life on September 1, 2024 and sell it today you would lose (41,000) from holding Lotte Non Life or give up 16.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangsin Energy Display vs. Lotte Non Life
Performance |
| Timeline |
| Sangsin Energy Display |
| Lotte Non Life |
Sangsin Energy and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsin Energy and Lotte Non
The main advantage of trading using opposite Sangsin Energy and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsin Energy position performs unexpectedly, Lotte Non 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 Non will offset losses from the drop in Lotte Non's long position.| Sangsin Energy vs. Korea New Network | Sangsin Energy vs. ICD Co | Sangsin Energy vs. DYPNF CoLtd | Sangsin Energy vs. Busan Industrial Co |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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