Correlation Between Aprogen Healthcare and Lotte Chemical
Can any of the company-specific risk be diversified away by investing in both Aprogen Healthcare and Lotte Chemical 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 Aprogen Healthcare and Lotte Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aprogen Healthcare Games and Lotte Chemical Corp, you can compare the effects of market volatilities on Aprogen Healthcare and Lotte Chemical 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 Aprogen Healthcare with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aprogen Healthcare and Lotte Chemical.
Diversification Opportunities for Aprogen Healthcare and Lotte Chemical
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aprogen and Lotte is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Aprogen Healthcare Games and Lotte Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chemical Corp and Aprogen Healthcare 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 Aprogen Healthcare Games are associated (or correlated) with Lotte Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chemical Corp has no effect on the direction of Aprogen Healthcare i.e., Aprogen Healthcare and Lotte Chemical go up and down completely randomly.
Pair Corralation between Aprogen Healthcare and Lotte Chemical
Assuming the 90 days trading horizon Aprogen Healthcare Games is expected to under-perform the Lotte Chemical. In addition to that, Aprogen Healthcare is 1.62 times more volatile than Lotte Chemical Corp. It trades about -0.04 of its total potential returns per unit of risk. Lotte Chemical Corp is currently generating about -0.06 per unit of volatility. If you would invest 17,512,600 in Lotte Chemical Corp on September 14, 2024 and sell it today you would lose (11,012,600) from holding Lotte Chemical Corp or give up 62.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.1% |
| Values | Daily Returns |
Aprogen Healthcare Games vs. Lotte Chemical Corp
Performance |
| Timeline |
| Aprogen Healthcare Games |
| Lotte Chemical Corp |
Aprogen Healthcare and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aprogen Healthcare and Lotte Chemical
The main advantage of trading using opposite Aprogen Healthcare and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aprogen Healthcare position performs unexpectedly, Lotte Chemical 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 Chemical will offset losses from the drop in Lotte Chemical's long position.| Aprogen Healthcare vs. Cube Entertainment | Aprogen Healthcare vs. Dreamus Company | Aprogen Healthcare vs. LG Energy Solution | Aprogen Healthcare vs. Dongwon System |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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