Correlation Between Lotte Data and Mirae Asset
Can any of the company-specific risk be diversified away by investing in both Lotte Data and Mirae Asset 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 Mirae Asset 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 Mirae Asset Daewoo, you can compare the effects of market volatilities on Lotte Data and Mirae Asset 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 Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and Mirae Asset.
Diversification Opportunities for Lotte Data and Mirae Asset
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Mirae is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and Mirae Asset Daewoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirae Asset Daewoo 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 Mirae Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirae Asset Daewoo has no effect on the direction of Lotte Data i.e., Lotte Data and Mirae Asset go up and down completely randomly.
Pair Corralation between Lotte Data and Mirae Asset
Assuming the 90 days trading horizon Lotte Data is expected to generate 3.72 times less return on investment than Mirae Asset. In addition to that, Lotte Data is 2.22 times more volatile than Mirae Asset Daewoo. It trades about 0.01 of its total potential returns per unit of risk. Mirae Asset Daewoo is currently generating about 0.05 per unit of volatility. If you would invest 435,500 in Mirae Asset Daewoo on October 25, 2024 and sell it today you would earn a total of 3,500 from holding Mirae Asset Daewoo or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Data Communication vs. Mirae Asset Daewoo
Performance |
| Timeline |
| Lotte Data Communication |
| Mirae Asset Daewoo |
Lotte Data and Mirae Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and Mirae Asset
The main advantage of trading using opposite Lotte Data and Mirae Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, Mirae Asset 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 Mirae Asset will offset losses from the drop in Mirae Asset'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 |
| Mirae Asset vs. Solus Advanced Materials | Mirae Asset vs. Narae Nanotech Corp | Mirae Asset vs. Orbitech Co | Mirae Asset vs. Lake Materials 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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