Correlation Between WooriNet and Lotte Data
Can any of the company-specific risk be diversified away by investing in both WooriNet 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 WooriNet and Lotte Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WooriNet and Lotte Data Communication, you can compare the effects of market volatilities on WooriNet 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 WooriNet with a short position of Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of WooriNet and Lotte Data.
Diversification Opportunities for WooriNet and Lotte Data
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between WooriNet and Lotte is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding WooriNet 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 WooriNet 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 WooriNet 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 WooriNet i.e., WooriNet and Lotte Data go up and down completely randomly.
Pair Corralation between WooriNet and Lotte Data
Assuming the 90 days trading horizon WooriNet is expected to under-perform the Lotte Data. In addition to that, WooriNet is 1.41 times more volatile than Lotte Data Communication. It trades about -0.11 of its total potential returns per unit of risk. Lotte Data Communication is currently generating about -0.07 per unit of volatility. If you would invest 2,050,000 in Lotte Data Communication on September 13, 2024 and sell it today you would lose (110,000) from holding Lotte Data Communication or give up 5.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
WooriNet vs. Lotte Data Communication
Performance |
| Timeline |
| WooriNet |
| Lotte Data Communication |
WooriNet and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WooriNet and Lotte Data
The main advantage of trading using opposite WooriNet and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WooriNet 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.| WooriNet vs. Lotte Data Communication | WooriNet vs. Clean Science co | WooriNet vs. Seoul Electronics Telecom | WooriNet vs. ECSTELECOM Co |
| Lotte Data vs. SK Holdings Co | Lotte Data vs. Solution Advanced Technology | Lotte Data vs. Busan Industrial Co | Lotte Data vs. Busan Ind |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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