Correlation Between Lotte Data and Daishin Information
Can any of the company-specific risk be diversified away by investing in both Lotte Data and Daishin Information 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 Daishin Information 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 Daishin Information Communications, you can compare the effects of market volatilities on Lotte Data and Daishin Information 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 Daishin Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and Daishin Information.
Diversification Opportunities for Lotte Data and Daishin Information
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Daishin is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and Daishin Information Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Information 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 Daishin Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Information has no effect on the direction of Lotte Data i.e., Lotte Data and Daishin Information go up and down completely randomly.
Pair Corralation between Lotte Data and Daishin Information
Assuming the 90 days trading horizon Lotte Data Communication is expected to under-perform the Daishin Information. In addition to that, Lotte Data is 1.4 times more volatile than Daishin Information Communications. It trades about -0.01 of its total potential returns per unit of risk. Daishin Information Communications is currently generating about 0.0 per unit of volatility. If you would invest 118,020 in Daishin Information Communications on November 1, 2024 and sell it today you would lose (13,820) from holding Daishin Information Communications or give up 11.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Data Communication vs. Daishin Information Communicat
Performance |
| Timeline |
| Lotte Data Communication |
| Daishin Information |
Lotte Data and Daishin Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and Daishin Information
The main advantage of trading using opposite Lotte Data and Daishin Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, Daishin Information 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 Daishin Information will offset losses from the drop in Daishin Information's long position.| Lotte Data vs. Korea Steel Co | Lotte Data vs. Wonil Special Steel | Lotte Data vs. Korean Reinsurance Co | Lotte Data vs. SeAH Besteel Corp |
| Daishin Information vs. Orbitech Co | Daishin Information vs. Spolytech Co | Daishin Information vs. Narae Nanotech Corp | Daishin Information vs. SungMoon Electronics 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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