Correlation Between Lotte Data and Adaptive Plasma
Can any of the company-specific risk be diversified away by investing in both Lotte Data and Adaptive Plasma 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 Adaptive Plasma 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 Adaptive Plasma Technology, you can compare the effects of market volatilities on Lotte Data and Adaptive Plasma 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 Adaptive Plasma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and Adaptive Plasma.
Diversification Opportunities for Lotte Data and Adaptive Plasma
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lotte and Adaptive is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and Adaptive Plasma Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptive Plasma Tech 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 Adaptive Plasma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptive Plasma Tech has no effect on the direction of Lotte Data i.e., Lotte Data and Adaptive Plasma go up and down completely randomly.
Pair Corralation between Lotte Data and Adaptive Plasma
Assuming the 90 days trading horizon Lotte Data Communication is expected to under-perform the Adaptive Plasma. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Data Communication is 1.9 times less risky than Adaptive Plasma. The stock trades about -0.11 of its potential returns per unit of risk. The Adaptive Plasma Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 742,000 in Adaptive Plasma Technology on November 9, 2024 and sell it today you would lose (2,000) from holding Adaptive Plasma Technology or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Data Communication vs. Adaptive Plasma Technology
Performance |
| Timeline |
| Lotte Data Communication |
| Adaptive Plasma Tech |
Lotte Data and Adaptive Plasma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and Adaptive Plasma
The main advantage of trading using opposite Lotte Data and Adaptive Plasma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, Adaptive Plasma 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 Adaptive Plasma will offset losses from the drop in Adaptive Plasma's long position.| Lotte Data vs. Sangsin Energy Display | Lotte Data vs. Korea Steel Co | Lotte Data vs. CU Medical Systems | Lotte Data vs. Inzi Display CoLtd |
| Adaptive Plasma vs. SBI Investment KOREA | Adaptive Plasma vs. Stic Investments | Adaptive Plasma vs. Lotte Chilsung Beverage | Adaptive Plasma vs. Sam Yang Foods |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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