Correlation Between JC Chemical and Lotte Rental
Can any of the company-specific risk be diversified away by investing in both JC Chemical and Lotte Rental 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 JC Chemical and Lotte Rental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JC Chemical Co and Lotte Rental Co, you can compare the effects of market volatilities on JC Chemical and Lotte Rental 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 JC Chemical with a short position of Lotte Rental. Check out your portfolio center. Please also check ongoing floating volatility patterns of JC Chemical and Lotte Rental.
Diversification Opportunities for JC Chemical and Lotte Rental
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 137950 and Lotte is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding JC Chemical Co and Lotte Rental Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Rental and JC Chemical 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 JC Chemical Co are associated (or correlated) with Lotte Rental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Rental has no effect on the direction of JC Chemical i.e., JC Chemical and Lotte Rental go up and down completely randomly.
Pair Corralation between JC Chemical and Lotte Rental
Assuming the 90 days trading horizon JC Chemical Co is expected to under-perform the Lotte Rental. In addition to that, JC Chemical is 1.44 times more volatile than Lotte Rental Co. It trades about -0.1 of its total potential returns per unit of risk. Lotte Rental Co is currently generating about 0.02 per unit of volatility. If you would invest 2,710,000 in Lotte Rental Co on November 4, 2024 and sell it today you would earn a total of 130,000 from holding Lotte Rental Co or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JC Chemical Co vs. Lotte Rental Co
Performance |
| Timeline |
| JC Chemical |
| Lotte Rental |
JC Chemical and Lotte Rental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JC Chemical and Lotte Rental
The main advantage of trading using opposite JC Chemical and Lotte Rental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JC Chemical position performs unexpectedly, Lotte Rental 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 Rental will offset losses from the drop in Lotte Rental's long position.| JC Chemical vs. Sangsangin Investment Securities | JC Chemical vs. Stic Investments | JC Chemical vs. Inzi Display CoLtd | JC Chemical vs. PLAYWITH |
| Lotte Rental vs. Lotte Non Life Insurance | Lotte Rental vs. DB Financial Investment | Lotte Rental vs. Tway Air Co | Lotte Rental vs. Samsung Life Insurance |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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