Correlation Between Grand Korea and Lotte Chemical
Can any of the company-specific risk be diversified away by investing in both Grand Korea 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 Grand Korea and Lotte Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Korea Leisure and Lotte Chemical Corp, you can compare the effects of market volatilities on Grand Korea 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 Grand Korea with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Korea and Lotte Chemical.
Diversification Opportunities for Grand Korea and Lotte Chemical
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grand and Lotte is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Grand Korea Leisure 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 Grand Korea 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 Grand Korea Leisure 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 Grand Korea i.e., Grand Korea and Lotte Chemical go up and down completely randomly.
Pair Corralation between Grand Korea and Lotte Chemical
Assuming the 90 days trading horizon Grand Korea Leisure is expected to generate 0.55 times more return on investment than Lotte Chemical. However, Grand Korea Leisure is 1.8 times less risky than Lotte Chemical. It trades about -0.01 of its potential returns per unit of risk. Lotte Chemical Corp is currently generating about -0.1 per unit of risk. If you would invest 1,260,130 in Grand Korea Leisure on November 3, 2024 and sell it today you would lose (71,130) from holding Grand Korea Leisure or give up 5.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Korea Leisure vs. Lotte Chemical Corp
Performance |
| Timeline |
| Grand Korea Leisure |
| Lotte Chemical Corp |
Grand Korea and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Korea and Lotte Chemical
The main advantage of trading using opposite Grand Korea and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Korea 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.| Grand Korea vs. Dongil Metal Co | Grand Korea vs. Anam Electronics Co | Grand Korea vs. Korea Electronic Certification | Grand Korea vs. PJ Electronics Co |
| Lotte Chemical vs. Samhyun Steel Co | Lotte Chemical vs. LG Household Healthcare | Lotte Chemical vs. Seoyon Topmetal Co | Lotte Chemical vs. Hanjoo Light Metal |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |