Correlation Between Lotte Data and EBEST Investment
Can any of the company-specific risk be diversified away by investing in both Lotte Data and EBEST Investment 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 EBEST Investment 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 EBEST Investment Securities, you can compare the effects of market volatilities on Lotte Data and EBEST Investment 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 EBEST Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and EBEST Investment.
Diversification Opportunities for Lotte Data and EBEST Investment
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotte and EBEST is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and EBEST Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBEST Investment Sec 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 EBEST Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBEST Investment Sec has no effect on the direction of Lotte Data i.e., Lotte Data and EBEST Investment go up and down completely randomly.
Pair Corralation between Lotte Data and EBEST Investment
Assuming the 90 days trading horizon Lotte Data Communication is expected to under-perform the EBEST Investment. In addition to that, Lotte Data is 1.47 times more volatile than EBEST Investment Securities. It trades about -0.09 of its total potential returns per unit of risk. EBEST Investment Securities is currently generating about -0.1 per unit of volatility. If you would invest 472,000 in EBEST Investment Securities on November 2, 2024 and sell it today you would lose (70,500) from holding EBEST Investment Securities or give up 14.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Data Communication vs. EBEST Investment Securities
Performance |
| Timeline |
| Lotte Data Communication |
| EBEST Investment Sec |
Lotte Data and EBEST Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and EBEST Investment
The main advantage of trading using opposite Lotte Data and EBEST Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, EBEST Investment 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 EBEST Investment will offset losses from the drop in EBEST Investment's long position.| Lotte Data vs. KMH Hitech Co | Lotte Data vs. Dongkuk Structures Construction | Lotte Data vs. PNC Technologies co | Lotte Data vs. Kyeryong Construction Industrial |
| EBEST Investment vs. EV Advanced Material | EBEST Investment vs. Hana Materials | EBEST Investment vs. PI Advanced Materials | EBEST Investment vs. RF Materials 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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