Correlation Between Lotte Data and Kyung In
Can any of the company-specific risk be diversified away by investing in both Lotte Data and Kyung In 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 Kyung In 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 Kyung In Synthetic Corp, you can compare the effects of market volatilities on Lotte Data and Kyung In 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 Kyung In. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and Kyung In.
Diversification Opportunities for Lotte Data and Kyung In
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lotte and Kyung is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and Kyung In Synthetic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyung In Synthetic 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 Kyung In. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyung In Synthetic has no effect on the direction of Lotte Data i.e., Lotte Data and Kyung In go up and down completely randomly.
Pair Corralation between Lotte Data and Kyung In
Assuming the 90 days trading horizon Lotte Data Communication is expected to generate 1.64 times more return on investment than Kyung In. However, Lotte Data is 1.64 times more volatile than Kyung In Synthetic Corp. It trades about 0.0 of its potential returns per unit of risk. Kyung In Synthetic Corp is currently generating about -0.03 per unit of risk. If you would invest 2,555,154 in Lotte Data Communication on October 16, 2024 and sell it today you would lose (535,154) from holding Lotte Data Communication or give up 20.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Data Communication vs. Kyung In Synthetic Corp
Performance |
| Timeline |
| Lotte Data Communication |
| Kyung In Synthetic |
Lotte Data and Kyung In Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and Kyung In
The main advantage of trading using opposite Lotte Data and Kyung In positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, Kyung In 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 Kyung In will offset losses from the drop in Kyung In's long position.| Lotte Data vs. ECSTELECOM Co | Lotte Data vs. Finebesteel | Lotte Data vs. Dong A Steel Technology | Lotte Data vs. Shin Steel Co |
| Kyung In vs. Korea Information Communications | Kyung In vs. Lotte Data Communication | Kyung In vs. ECSTELECOM Co | Kyung In vs. DoubleU Games 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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