Correlation Between Lotte Data and Playgram
Can any of the company-specific risk be diversified away by investing in both Lotte Data and Playgram 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 Playgram 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 Playgram Co, you can compare the effects of market volatilities on Lotte Data and Playgram 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 Playgram. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and Playgram.
Diversification Opportunities for Lotte Data and Playgram
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lotte and Playgram is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and Playgram Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playgram 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 Playgram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playgram has no effect on the direction of Lotte Data i.e., Lotte Data and Playgram go up and down completely randomly.
Pair Corralation between Lotte Data and Playgram
Assuming the 90 days trading horizon Lotte Data is expected to generate 6.5 times less return on investment than Playgram. But when comparing it to its historical volatility, Lotte Data Communication is 1.64 times less risky than Playgram. It trades about 0.05 of its potential returns per unit of risk. Playgram Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 36,700 in Playgram Co on October 16, 2024 and sell it today you would earn a total of 4,900 from holding Playgram Co or generate 13.35% 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. Playgram Co
Performance |
| Timeline |
| Lotte Data Communication |
| Playgram |
Lotte Data and Playgram Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and Playgram
The main advantage of trading using opposite Lotte Data and Playgram positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, Playgram 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 Playgram will offset losses from the drop in Playgram's long position.| Lotte Data vs. Daechang Steel Co | Lotte Data vs. Hankuk Steel Wire | Lotte Data vs. Han Kook Steel | Lotte Data vs. LG Household Healthcare |
| Playgram vs. Songwon Industrial Co | Playgram vs. NICE Information Service | Playgram vs. Daou Data Corp | Playgram vs. Sam Yang Foods |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |