Correlation Between Lotte Data and Atinum Investment
Can any of the company-specific risk be diversified away by investing in both Lotte Data and Atinum Investment 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 Atinum Investment 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 Atinum Investment Co, you can compare the effects of market volatilities on Lotte Data and Atinum Investment 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 Atinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and Atinum Investment.
Diversification Opportunities for Lotte Data and Atinum Investment
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotte and Atinum is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and Atinum Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atinum Investment 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 Atinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atinum Investment has no effect on the direction of Lotte Data i.e., Lotte Data and Atinum Investment go up and down completely randomly.
Pair Corralation between Lotte Data and Atinum Investment
Assuming the 90 days trading horizon Lotte Data Communication is expected to generate 1.18 times more return on investment than Atinum Investment. However, Lotte Data is 1.18 times more volatile than Atinum Investment Co. It trades about 0.15 of its potential returns per unit of risk. Atinum Investment Co is currently generating about 0.02 per unit of risk. If you would invest 1,986,000 in Lotte Data Communication on October 15, 2024 and sell it today you would earn a total of 104,000 from holding Lotte Data Communication or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Data Communication vs. Atinum Investment Co
Performance |
| Timeline |
| Lotte Data Communication |
| Atinum Investment |
Lotte Data and Atinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and Atinum Investment
The main advantage of trading using opposite Lotte Data and Atinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, Atinum Investment 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 Atinum Investment will offset losses from the drop in Atinum Investment's long position.| Lotte Data vs. Hankukpackage Co | Lotte Data vs. Wireless Power Amplifier | Lotte Data vs. Phoenix Materials Co | Lotte Data vs. PI Advanced Materials |
| Atinum Investment vs. Hotel Shilla Co | Atinum Investment vs. Polaris Office Corp | Atinum Investment vs. Lotte Data Communication | Atinum Investment vs. Daou Data Corp |
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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