Correlation Between DSC Investment and Lotte Non
Can any of the company-specific risk be diversified away by investing in both DSC Investment 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 DSC Investment and Lotte Non into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSC Investment and Lotte Non Life Insurance, you can compare the effects of market volatilities on DSC Investment 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 DSC Investment with a short position of Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSC Investment and Lotte Non.
Diversification Opportunities for DSC Investment and Lotte Non
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DSC and Lotte is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding DSC Investment 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 DSC Investment 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 DSC Investment 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 DSC Investment i.e., DSC Investment and Lotte Non go up and down completely randomly.
Pair Corralation between DSC Investment and Lotte Non
Assuming the 90 days trading horizon DSC Investment is expected to under-perform the Lotte Non. But the stock apears to be less risky and, when comparing its historical volatility, DSC Investment is 1.35 times less risky than Lotte Non. The stock trades about -0.01 of its potential returns per unit of risk. The Lotte Non Life Insurance is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 153,000 in Lotte Non Life Insurance on October 10, 2024 and sell it today you would earn a total of 53,000 from holding Lotte Non Life Insurance or generate 34.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DSC Investment vs. Lotte Non Life Insurance
Performance |
| Timeline |
| DSC Investment |
| Lotte Non Life |
DSC Investment and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSC Investment and Lotte Non
The main advantage of trading using opposite DSC Investment and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSC Investment 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.| DSC Investment vs. Nh Investment And | DSC Investment vs. Hanwha InvestmentSecurities Co | DSC Investment vs. Busan Industrial Co | DSC Investment vs. Busan Ind |
| Lotte Non vs. Nice Information Telecommunication | Lotte Non vs. Playgram Co | Lotte Non vs. Iljin Display | Lotte Non vs. Shinil Industrial 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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