Correlation Between Lotte Data and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both Lotte Data and Haitai Confectionery 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 Haitai Confectionery 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 Haitai Confectionery Foods, you can compare the effects of market volatilities on Lotte Data and Haitai Confectionery 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 Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and Haitai Confectionery.
Diversification Opportunities for Lotte Data and Haitai Confectionery
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lotte and Haitai is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and Haitai Confectionery Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haitai Confectionery 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 Haitai Confectionery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haitai Confectionery has no effect on the direction of Lotte Data i.e., Lotte Data and Haitai Confectionery go up and down completely randomly.
Pair Corralation between Lotte Data and Haitai Confectionery
Assuming the 90 days trading horizon Lotte Data Communication is expected to generate 1.74 times more return on investment than Haitai Confectionery. However, Lotte Data is 1.74 times more volatile than Haitai Confectionery Foods. It trades about 0.07 of its potential returns per unit of risk. Haitai Confectionery Foods is currently generating about -0.17 per unit of risk. If you would invest 1,937,000 in Lotte Data Communication on October 30, 2024 and sell it today you would earn a total of 45,000 from holding Lotte Data Communication or generate 2.32% 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. Haitai Confectionery Foods
Performance |
| Timeline |
| Lotte Data Communication |
| Haitai Confectionery |
Lotte Data and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and Haitai Confectionery
The main advantage of trading using opposite Lotte Data and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, Haitai Confectionery 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 Haitai Confectionery will offset losses from the drop in Haitai Confectionery's long position.| Lotte Data vs. Daiyang Metal Co | Lotte Data vs. CKH Food Health | Lotte Data vs. Seoyon Topmetal Co | Lotte Data vs. Korea Industrial Co |
| Haitai Confectionery vs. Camus Engineering Construction | Haitai Confectionery vs. Nable Communications | Haitai Confectionery vs. Neungyule Education | Haitai Confectionery vs. Asiana Airlines |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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