Correlation Between V One and Lotte Chilsung
Can any of the company-specific risk be diversified away by investing in both V One 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 V One and Lotte Chilsung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between V One Tech Co and Lotte Chilsung Beverage, you can compare the effects of market volatilities on V One 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 V One with a short position of Lotte Chilsung. Check out your portfolio center. Please also check ongoing floating volatility patterns of V One and Lotte Chilsung.
Diversification Opportunities for V One and Lotte Chilsung
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 251630 and Lotte is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding V One Tech Co 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 V One 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 V One Tech Co 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 V One i.e., V One and Lotte Chilsung go up and down completely randomly.
Pair Corralation between V One and Lotte Chilsung
Assuming the 90 days trading horizon V One Tech Co is expected to generate 2.34 times more return on investment than Lotte Chilsung. However, V One is 2.34 times more volatile than Lotte Chilsung Beverage. It trades about 0.29 of its potential returns per unit of risk. Lotte Chilsung Beverage is currently generating about -0.34 per unit of risk. If you would invest 396,000 in V One Tech Co on October 31, 2024 and sell it today you would earn a total of 77,000 from holding V One Tech Co or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
V One Tech Co vs. Lotte Chilsung Beverage
Performance |
| Timeline |
| V One Tech |
| Lotte Chilsung Beverage |
V One and Lotte Chilsung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with V One and Lotte Chilsung
The main advantage of trading using opposite V One and Lotte Chilsung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if V One 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.| V One vs. Shinil Industrial Co | V One vs. Organic Special Pet | V One vs. Hyundai Industrial Co | V One vs. Songwon Industrial Co |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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