Correlation Between Lotte Data and Lotte Non
Can any of the company-specific risk be diversified away by investing in both Lotte Data 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 Lotte Data and Lotte Non into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Data Communication and Lotte Non Life Insurance, you can compare the effects of market volatilities on Lotte Data 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 Lotte Data with a short position of Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and Lotte Non.
Diversification Opportunities for Lotte Data and Lotte Non
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lotte and Lotte is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication 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 Lotte Data 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 Lotte Data Communication 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 Lotte Data i.e., Lotte Data and Lotte Non go up and down completely randomly.
Pair Corralation between Lotte Data and Lotte Non
Assuming the 90 days trading horizon Lotte Data Communication is expected to generate 1.45 times more return on investment than Lotte Non. However, Lotte Data is 1.45 times more volatile than Lotte Non Life Insurance. It trades about 0.14 of its potential returns per unit of risk. Lotte Non Life Insurance is currently generating about -0.1 per unit of risk. If you would invest 1,890,000 in Lotte Data Communication on October 28, 2024 and sell it today you would earn a total of 92,000 from holding Lotte Data Communication or generate 4.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Data Communication vs. Lotte Non Life Insurance
Performance |
| Timeline |
| Lotte Data Communication |
| Lotte Non Life |
Lotte Data and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and Lotte Non
The main advantage of trading using opposite Lotte Data and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data 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.| Lotte Data vs. Hyundai Home Shopping | Lotte Data vs. Daejung Chemicals Metals | Lotte Data vs. Hansol Homedeco Co | Lotte Data vs. Homecast CoLtd |
| Lotte Non vs. Global Standard Technology | Lotte Non vs. Digital Power Communications | Lotte Non vs. Korea Information Communications | Lotte Non vs. ENF Technology 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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