Correlation Between Lotte Data and Atec
Can any of the company-specific risk be diversified away by investing in both Lotte Data and Atec 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 Atec 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 Atec Co, you can compare the effects of market volatilities on Lotte Data and Atec 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 Atec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and Atec.
Diversification Opportunities for Lotte Data and Atec
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lotte and Atec is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and Atec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atec 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 Atec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atec has no effect on the direction of Lotte Data i.e., Lotte Data and Atec go up and down completely randomly.
Pair Corralation between Lotte Data and Atec
Assuming the 90 days trading horizon Lotte Data Communication is expected to under-perform the Atec. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Data Communication is 5.9 times less risky than Atec. The stock trades about -0.04 of its potential returns per unit of risk. The Atec Co is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,655,000 in Atec Co on September 15, 2024 and sell it today you would earn a total of 2,060,000 from holding Atec Co or generate 124.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Data Communication vs. Atec Co
Performance |
| Timeline |
| Lotte Data Communication |
| Atec |
Lotte Data and Atec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and Atec
The main advantage of trading using opposite Lotte Data and Atec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, Atec 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 Atec will offset losses from the drop in Atec's long position.| Lotte Data vs. SK Holdings Co | Lotte Data vs. Solution Advanced Technology | Lotte Data vs. Busan Industrial Co | Lotte Data vs. Busan Ind |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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