Correlation Between DYPNF CoLtd and Lotte Chilsung
Can any of the company-specific risk be diversified away by investing in both DYPNF CoLtd 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 DYPNF CoLtd and Lotte Chilsung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DYPNF CoLtd and Lotte Chilsung Beverage, you can compare the effects of market volatilities on DYPNF CoLtd 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 DYPNF CoLtd with a short position of Lotte Chilsung. Check out your portfolio center. Please also check ongoing floating volatility patterns of DYPNF CoLtd and Lotte Chilsung.
Diversification Opportunities for DYPNF CoLtd and Lotte Chilsung
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between DYPNF and Lotte is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding DYPNF CoLtd 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 DYPNF CoLtd 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 DYPNF CoLtd 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 DYPNF CoLtd i.e., DYPNF CoLtd and Lotte Chilsung go up and down completely randomly.
Pair Corralation between DYPNF CoLtd and Lotte Chilsung
Assuming the 90 days trading horizon DYPNF CoLtd is expected to generate 1.27 times more return on investment than Lotte Chilsung. However, DYPNF CoLtd is 1.27 times more volatile than Lotte Chilsung Beverage. It trades about -0.18 of its potential returns per unit of risk. Lotte Chilsung Beverage is currently generating about -0.41 per unit of risk. If you would invest 1,256,000 in DYPNF CoLtd on October 20, 2024 and sell it today you would lose (88,000) from holding DYPNF CoLtd or give up 7.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DYPNF CoLtd vs. Lotte Chilsung Beverage
Performance |
| Timeline |
| DYPNF CoLtd |
| Lotte Chilsung Beverage |
DYPNF CoLtd and Lotte Chilsung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DYPNF CoLtd and Lotte Chilsung
The main advantage of trading using opposite DYPNF CoLtd and Lotte Chilsung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DYPNF CoLtd 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.| DYPNF CoLtd vs. Seohee Construction Co | DYPNF CoLtd vs. Seers Technology | DYPNF CoLtd vs. AeroSpace Technology of | DYPNF CoLtd vs. Nam Hwa Construction |
| Lotte Chilsung vs. CJ Seafood Corp | Lotte Chilsung vs. Tway Air Co | Lotte Chilsung vs. Samyang Foods Co | Lotte Chilsung vs. Cloud Air CoLtd |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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