Correlation Between Kolon Plastics and Lotte Chilsung
Can any of the company-specific risk be diversified away by investing in both Kolon Plastics 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 Kolon Plastics and Lotte Chilsung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kolon Plastics and Lotte Chilsung Beverage, you can compare the effects of market volatilities on Kolon Plastics 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 Kolon Plastics with a short position of Lotte Chilsung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kolon Plastics and Lotte Chilsung.
Diversification Opportunities for Kolon Plastics and Lotte Chilsung
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kolon and Lotte is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Kolon Plastics 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 Kolon Plastics 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 Kolon Plastics 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 Kolon Plastics i.e., Kolon Plastics and Lotte Chilsung go up and down completely randomly.
Pair Corralation between Kolon Plastics and Lotte Chilsung
Assuming the 90 days trading horizon Kolon Plastics is expected to generate 1.57 times more return on investment than Lotte Chilsung. However, Kolon Plastics is 1.57 times more volatile than Lotte Chilsung Beverage. It trades about -0.03 of its potential returns per unit of risk. Lotte Chilsung Beverage is currently generating about -0.06 per unit of risk. If you would invest 969,757 in Kolon Plastics on November 7, 2024 and sell it today you would lose (395,757) from holding Kolon Plastics or give up 40.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kolon Plastics vs. Lotte Chilsung Beverage
Performance |
| Timeline |
| Kolon Plastics |
| Lotte Chilsung Beverage |
Kolon Plastics and Lotte Chilsung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kolon Plastics and Lotte Chilsung
The main advantage of trading using opposite Kolon Plastics and Lotte Chilsung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kolon Plastics 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.| Kolon Plastics vs. CU Medical Systems | Kolon Plastics vs. KB Financial Group | Kolon Plastics vs. Lotte Data Communication | Kolon Plastics vs. Hankukpackage Co |
| Lotte Chilsung vs. System and Application | Lotte Chilsung vs. Lotte Data Communication | Lotte Chilsung vs. Jeju Beer Co | Lotte Chilsung vs. SCI Information Service |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |