Correlation Between ENF Technology and Lotte Chilsung
Can any of the company-specific risk be diversified away by investing in both ENF Technology and Lotte Chilsung 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 ENF Technology and Lotte Chilsung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENF Technology Co and Lotte Chilsung Beverage, you can compare the effects of market volatilities on ENF Technology and Lotte Chilsung 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 ENF Technology with a short position of Lotte Chilsung. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENF Technology and Lotte Chilsung.
Diversification Opportunities for ENF Technology and Lotte Chilsung
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ENF and Lotte is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ENF Technology Co and Lotte Chilsung Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chilsung Beverage and ENF Technology 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 ENF Technology Co are associated (or correlated) with Lotte Chilsung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chilsung Beverage has no effect on the direction of ENF Technology i.e., ENF Technology and Lotte Chilsung go up and down completely randomly.
Pair Corralation between ENF Technology and Lotte Chilsung
Assuming the 90 days trading horizon ENF Technology Co is expected to generate 2.36 times more return on investment than Lotte Chilsung. However, ENF Technology is 2.36 times more volatile than Lotte Chilsung Beverage. It trades about 0.35 of its potential returns per unit of risk. Lotte Chilsung Beverage is currently generating about -0.24 per unit of risk. If you would invest 1,640,030 in ENF Technology Co on October 12, 2024 and sell it today you would earn a total of 434,970 from holding ENF Technology Co or generate 26.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENF Technology Co vs. Lotte Chilsung Beverage
Performance |
| Timeline |
| ENF Technology |
| Lotte Chilsung Beverage |
ENF Technology and Lotte Chilsung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENF Technology and Lotte Chilsung
The main advantage of trading using opposite ENF Technology and Lotte Chilsung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENF Technology position performs unexpectedly, Lotte Chilsung 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 Chilsung will offset losses from the drop in Lotte Chilsung's long position.| ENF Technology vs. Dongjin Semichem Co | ENF Technology vs. SS TECH | ENF Technology vs. Tokai Carbon Korea | ENF Technology vs. Soulbrain Holdings Co |
| Lotte Chilsung vs. Daelim Trading Co | Lotte Chilsung vs. Taegu Broadcasting | Lotte Chilsung vs. ENF Technology Co | Lotte Chilsung vs. Hanjin Transportation 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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