Correlation Between Nable Communications and Lotte Chemical
Can any of the company-specific risk be diversified away by investing in both Nable Communications 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 Nable Communications and Lotte Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nable Communications and Lotte Chemical Corp, you can compare the effects of market volatilities on Nable Communications 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 Nable Communications with a short position of Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nable Communications and Lotte Chemical.
Diversification Opportunities for Nable Communications and Lotte Chemical
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nable and Lotte is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nable Communications 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 Nable Communications 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 Nable Communications 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 Nable Communications i.e., Nable Communications and Lotte Chemical go up and down completely randomly.
Pair Corralation between Nable Communications and Lotte Chemical
Assuming the 90 days trading horizon Nable Communications is expected to generate 0.39 times more return on investment than Lotte Chemical. However, Nable Communications is 2.55 times less risky than Lotte Chemical. It trades about 0.0 of its potential returns per unit of risk. Lotte Chemical Corp is currently generating about -0.09 per unit of risk. If you would invest 722,000 in Nable Communications on September 14, 2024 and sell it today you would lose (22,000) from holding Nable Communications or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nable Communications vs. Lotte Chemical Corp
Performance |
| Timeline |
| Nable Communications |
| Lotte Chemical Corp |
Nable Communications and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nable Communications and Lotte Chemical
The main advantage of trading using opposite Nable Communications and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nable Communications 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.| Nable Communications vs. Automobile Pc | Nable Communications vs. YG Entertainment | Nable Communications vs. MEDIANA CoLtd | Nable Communications vs. MediaZen |
| Lotte Chemical vs. Ssangyong Information Communication | Lotte Chemical vs. Nable Communications | Lotte Chemical vs. Shinsegae Information Communication | Lotte Chemical vs. MetaLabs Co |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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