Correlation Between Lotte Data and Iljin Display
Can any of the company-specific risk be diversified away by investing in both Lotte Data and Iljin Display 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 Iljin Display 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 Iljin Display, you can compare the effects of market volatilities on Lotte Data and Iljin Display 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 Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and Iljin Display.
Diversification Opportunities for Lotte Data and Iljin Display
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lotte and Iljin is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display 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 Iljin Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iljin Display has no effect on the direction of Lotte Data i.e., Lotte Data and Iljin Display go up and down completely randomly.
Pair Corralation between Lotte Data and Iljin Display
Assuming the 90 days trading horizon Lotte Data Communication is expected to under-perform the Iljin Display. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Data Communication is 1.03 times less risky than Iljin Display. The stock trades about -0.11 of its potential returns per unit of risk. The Iljin Display is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 87,300 in Iljin Display on November 8, 2024 and sell it today you would lose (700.00) from holding Iljin Display or give up 0.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Data Communication vs. Iljin Display
Performance |
| Timeline |
| Lotte Data Communication |
| Iljin Display |
Lotte Data and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and Iljin Display
The main advantage of trading using opposite Lotte Data and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, Iljin Display 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 Iljin Display will offset losses from the drop in Iljin Display's long position.| Lotte Data vs. Ssangyong Information Communication | Lotte Data vs. Daishin Information Communications | Lotte Data vs. Digital Power Communications | Lotte Data vs. Dongbang Transport Logistics |
| Iljin Display vs. Mobile Appliance | Iljin Display vs. Automobile Pc | Iljin Display vs. FoodNamoo | Iljin Display vs. Korea Information Communications |
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 Stocks Directory module to find actively traded stocks across global markets.
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