Correlation Between Lotte Data and Kisan Telecom
Can any of the company-specific risk be diversified away by investing in both Lotte Data and Kisan Telecom 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 Kisan Telecom 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 Kisan Telecom Co, you can compare the effects of market volatilities on Lotte Data and Kisan Telecom 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 Kisan Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and Kisan Telecom.
Diversification Opportunities for Lotte Data and Kisan Telecom
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lotte and Kisan is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and Kisan Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kisan Telecom 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 Kisan Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kisan Telecom has no effect on the direction of Lotte Data i.e., Lotte Data and Kisan Telecom go up and down completely randomly.
Pair Corralation between Lotte Data and Kisan Telecom
Assuming the 90 days trading horizon Lotte Data Communication is expected to under-perform the Kisan Telecom. In addition to that, Lotte Data is 1.68 times more volatile than Kisan Telecom Co. It trades about -0.05 of its total potential returns per unit of risk. Kisan Telecom Co is currently generating about -0.03 per unit of volatility. If you would invest 196,700 in Kisan Telecom Co on October 22, 2024 and sell it today you would lose (16,400) from holding Kisan Telecom Co or give up 8.34% 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. Kisan Telecom Co
Performance |
| Timeline |
| Lotte Data Communication |
| Kisan Telecom |
Lotte Data and Kisan Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and Kisan Telecom
The main advantage of trading using opposite Lotte Data and Kisan Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, Kisan Telecom 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 Kisan Telecom will offset losses from the drop in Kisan Telecom's long position.| Lotte Data vs. Stic Investments | Lotte Data vs. DB Insurance Co | Lotte Data vs. EBEST Investment Securities | Lotte Data vs. Kbi Metal Co |
| Kisan Telecom vs. Digital Power Communications | Kisan Telecom vs. EBEST Investment Securities | Kisan Telecom vs. Ssangyong Information Communication | Kisan Telecom vs. TS Investment 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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