Correlation Between Microfriend and Lotte Non
Can any of the company-specific risk be diversified away by investing in both Microfriend and Lotte Non 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 Microfriend and Lotte Non into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microfriend and Lotte Non Life Insurance, you can compare the effects of market volatilities on Microfriend and Lotte Non 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 Microfriend with a short position of Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microfriend and Lotte Non.
Diversification Opportunities for Microfriend and Lotte Non
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microfriend and Lotte is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Microfriend and Lotte Non Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Non Life and Microfriend 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 Microfriend are associated (or correlated) with Lotte Non. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Non Life has no effect on the direction of Microfriend i.e., Microfriend and Lotte Non go up and down completely randomly.
Pair Corralation between Microfriend and Lotte Non
Assuming the 90 days trading horizon Microfriend is expected to under-perform the Lotte Non. In addition to that, Microfriend is 1.0 times more volatile than Lotte Non Life Insurance. It trades about -0.01 of its total potential returns per unit of risk. Lotte Non Life Insurance is currently generating about 0.03 per unit of volatility. If you would invest 152,500 in Lotte Non Life Insurance on August 25, 2024 and sell it today you would earn a total of 45,300 from holding Lotte Non Life Insurance or generate 29.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microfriend vs. Lotte Non Life Insurance
Performance |
| Timeline |
| Microfriend |
| Lotte Non Life |
Microfriend and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microfriend and Lotte Non
The main advantage of trading using opposite Microfriend and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microfriend position performs unexpectedly, Lotte Non 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 Non will offset losses from the drop in Lotte Non's long position.| Microfriend vs. PJ Metal Co | Microfriend vs. Eagon Industrial Co | Microfriend vs. Lotte Data Communication | Microfriend vs. Mobile Appliance |
| Lotte Non vs. AptaBio Therapeutics | Lotte Non vs. Daewoo SBI SPAC | Lotte Non vs. Dream Security co | Lotte Non vs. Microfriend |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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