Correlation Between Lotte Data and KT
Can any of the company-specific risk be diversified away by investing in both Lotte Data and KT 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 KT 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 KT Corporation, you can compare the effects of market volatilities on Lotte Data and KT 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 KT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and KT.
Diversification Opportunities for Lotte Data and KT
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and KT is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and KT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Corporation 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 KT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Corporation has no effect on the direction of Lotte Data i.e., Lotte Data and KT go up and down completely randomly.
Pair Corralation between Lotte Data and KT
Assuming the 90 days trading horizon Lotte Data Communication is expected to under-perform the KT. In addition to that, Lotte Data is 1.56 times more volatile than KT Corporation. It trades about -0.09 of its total potential returns per unit of risk. KT Corporation is currently generating about 0.07 per unit of volatility. If you would invest 3,670,274 in KT Corporation on November 3, 2024 and sell it today you would earn a total of 1,129,726 from holding KT Corporation or generate 30.78% 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. KT Corp.
Performance |
| Timeline |
| Lotte Data Communication |
| KT Corporation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Lotte Data and KT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and KT
The main advantage of trading using opposite Lotte Data and KT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, KT 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 KT will offset losses from the drop in KT's long position.| Lotte Data vs. GS Engineering Construction | Lotte Data vs. Keyang Electric Machinery | Lotte Data vs. Nable Communications | Lotte Data vs. Seohee Construction Co |
| KT vs. DONGKUK TED METAL | KT vs. Neungyule Education | KT vs. Nable Communications | KT vs. Seoul Electronics Telecom |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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