Correlation Between Lotte Data and Innowireless
Can any of the company-specific risk be diversified away by investing in both Lotte Data and Innowireless 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 Innowireless 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 Innowireless Co, you can compare the effects of market volatilities on Lotte Data and Innowireless 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 Innowireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and Innowireless.
Diversification Opportunities for Lotte Data and Innowireless
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lotte and Innowireless is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and Innowireless Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innowireless 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 Innowireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innowireless has no effect on the direction of Lotte Data i.e., Lotte Data and Innowireless go up and down completely randomly.
Pair Corralation between Lotte Data and Innowireless
Assuming the 90 days trading horizon Lotte Data Communication is expected to under-perform the Innowireless. In addition to that, Lotte Data is 1.27 times more volatile than Innowireless Co. It trades about -0.23 of its total potential returns per unit of risk. Innowireless Co is currently generating about 0.17 per unit of volatility. If you would invest 1,736,000 in Innowireless Co on September 1, 2024 and sell it today you would earn a total of 128,000 from holding Innowireless Co or generate 7.37% 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. Innowireless Co
Performance |
| Timeline |
| Lotte Data Communication |
| Innowireless |
Lotte Data and Innowireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and Innowireless
The main advantage of trading using opposite Lotte Data and Innowireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, Innowireless 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 Innowireless will offset losses from the drop in Innowireless' long position.| Lotte Data vs. SK Holdings Co | Lotte Data vs. Busan Industrial Co | Lotte Data vs. Busan Ind | Lotte Data vs. Mirae Asset Daewoo |
| Innowireless vs. LG Chemicals | Innowireless vs. Sung Bo Chemicals | Innowireless vs. Lotte Non Life Insurance | Innowireless vs. JC Chemical 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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