Correlation Between ABOV Semiconductor and Lotte Data
Can any of the company-specific risk be diversified away by investing in both ABOV Semiconductor 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 ABOV Semiconductor and Lotte Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABOV Semiconductor Co and Lotte Data Communication, you can compare the effects of market volatilities on ABOV Semiconductor 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 ABOV Semiconductor with a short position of Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABOV Semiconductor and Lotte Data.
Diversification Opportunities for ABOV Semiconductor and Lotte Data
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ABOV and Lotte is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ABOV Semiconductor 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 ABOV Semiconductor 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 ABOV Semiconductor 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 ABOV Semiconductor i.e., ABOV Semiconductor and Lotte Data go up and down completely randomly.
Pair Corralation between ABOV Semiconductor and Lotte Data
Assuming the 90 days trading horizon ABOV Semiconductor Co is expected to generate 1.37 times more return on investment than Lotte Data. However, ABOV Semiconductor is 1.37 times more volatile than Lotte Data Communication. It trades about 0.01 of its potential returns per unit of risk. Lotte Data Communication is currently generating about -0.01 per unit of risk. If you would invest 1,017,253 in ABOV Semiconductor Co on September 1, 2024 and sell it today you would lose (238,253) from holding ABOV Semiconductor Co or give up 23.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABOV Semiconductor Co vs. Lotte Data Communication
Performance |
| Timeline |
| ABOV Semiconductor |
| Lotte Data Communication |
ABOV Semiconductor and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABOV Semiconductor and Lotte Data
The main advantage of trading using opposite ABOV Semiconductor and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABOV Semiconductor 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.| ABOV Semiconductor vs. Dongsin Engineering Construction | ABOV Semiconductor vs. Doosan Fuel Cell | ABOV Semiconductor vs. Daishin Balance 1 | ABOV Semiconductor vs. Total Soft Bank |
| Lotte Data vs. SK Holdings Co | Lotte Data vs. Busan Industrial Co | Lotte Data vs. Busan Ind | Lotte Data vs. Mirae Asset Daewoo |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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