Correlation Between Lotte Data and GS Retail
Can any of the company-specific risk be diversified away by investing in both Lotte Data and GS Retail 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 Retail 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 Retail Co, you can compare the effects of market volatilities on Lotte Data and GS Retail 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 Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and GS Retail.
Diversification Opportunities for Lotte Data and GS Retail
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lotte and 007070 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail 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 Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of Lotte Data i.e., Lotte Data and GS Retail go up and down completely randomly.
Pair Corralation between Lotte Data and GS Retail
Assuming the 90 days trading horizon Lotte Data Communication is expected to generate 0.88 times more return on investment than GS Retail. However, Lotte Data Communication is 1.13 times less risky than GS Retail. It trades about -0.08 of its potential returns per unit of risk. GS Retail Co is currently generating about -0.15 per unit of risk. If you would invest 2,260,000 in Lotte Data Communication on October 24, 2024 and sell it today you would lose (295,000) from holding Lotte Data Communication or give up 13.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 72.13% |
| Values | Daily Returns |
Lotte Data Communication vs. GS Retail Co
Performance |
| Timeline |
| Lotte Data Communication |
| GS Retail |
Lotte Data and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and GS Retail
The main advantage of trading using opposite Lotte Data and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, GS Retail 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 Retail will offset losses from the drop in GS Retail's long position.| Lotte Data vs. National Plastic Co | Lotte Data vs. Phoenix Materials Co | Lotte Data vs. SCI Information Service | Lotte Data vs. Jeong Moon Information |
| GS Retail vs. Korea Information Communications | GS Retail vs. Lotte Data Communication | GS Retail vs. Hanwha Life Insurance | GS Retail vs. Innowireless 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |