Correlation Between Lotte Data and GS Engineering
Can any of the company-specific risk be diversified away by investing in both Lotte Data and GS Engineering 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 GS Engineering 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 GS Engineering Construction, you can compare the effects of market volatilities on Lotte Data and GS Engineering 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 GS Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and GS Engineering.
Diversification Opportunities for Lotte Data and GS Engineering
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lotte and 006360 is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and GS Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Engineering Const 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 GS Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Engineering Const has no effect on the direction of Lotte Data i.e., Lotte Data and GS Engineering go up and down completely randomly.
Pair Corralation between Lotte Data and GS Engineering
Assuming the 90 days trading horizon Lotte Data Communication is expected to generate 0.97 times more return on investment than GS Engineering. However, Lotte Data Communication is 1.03 times less risky than GS Engineering. It trades about 0.0 of its potential returns per unit of risk. GS Engineering Construction is currently generating about -0.01 per unit of risk. If you would invest 1,943,000 in Lotte Data Communication on October 26, 2024 and sell it today you would lose (10,000) from holding Lotte Data Communication or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Data Communication vs. GS Engineering Construction
Performance |
| Timeline |
| Lotte Data Communication |
| GS Engineering Const |
Lotte Data and GS Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and GS Engineering
The main advantage of trading using opposite Lotte Data and GS Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, GS Engineering 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 GS Engineering will offset losses from the drop in GS Engineering's long position.| Lotte Data vs. SK Holdings Co | Lotte Data vs. Busan Industrial Co | Lotte Data vs. Busan Ind | Lotte Data vs. RPBio Inc |
| GS Engineering vs. Hanmi Semiconductor Co | GS Engineering vs. ABOV Semiconductor Co | GS Engineering vs. PI Advanced Materials | GS Engineering vs. Automobile Pc |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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