Correlation Between Lotte Data and Rorze Systems
Can any of the company-specific risk be diversified away by investing in both Lotte Data and Rorze Systems 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 Rorze Systems 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 Rorze Systems, you can compare the effects of market volatilities on Lotte Data and Rorze Systems 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 Rorze Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and Rorze Systems.
Diversification Opportunities for Lotte Data and Rorze Systems
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lotte and Rorze is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and Rorze Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rorze Systems 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 Rorze Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rorze Systems has no effect on the direction of Lotte Data i.e., Lotte Data and Rorze Systems go up and down completely randomly.
Pair Corralation between Lotte Data and Rorze Systems
Assuming the 90 days trading horizon Lotte Data Communication is expected to generate 0.88 times more return on investment than Rorze Systems. However, Lotte Data Communication is 1.14 times less risky than Rorze Systems. It trades about 0.02 of its potential returns per unit of risk. Rorze Systems is currently generating about -0.24 per unit of risk. If you would invest 1,964,000 in Lotte Data Communication on October 20, 2024 and sell it today you would earn a total of 6,000 from holding Lotte Data Communication or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Data Communication vs. Rorze Systems
Performance |
| Timeline |
| Lotte Data Communication |
| Rorze Systems |
Lotte Data and Rorze Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and Rorze Systems
The main advantage of trading using opposite Lotte Data and Rorze Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, Rorze Systems 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 Rorze Systems will offset losses from the drop in Rorze Systems' long position.| Lotte Data vs. Asiana Airlines | Lotte Data vs. Jinro Distillers Co | Lotte Data vs. Inzi Display CoLtd | Lotte Data vs. Samlip General Foods |
| Rorze Systems vs. Korea New Network | Rorze Systems vs. Dong A Eltek | Rorze Systems vs. Dreamus Company | Rorze Systems vs. SK Bioscience Co |
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.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |