Correlation Between Lotte Data and LX Semicon
Can any of the company-specific risk be diversified away by investing in both Lotte Data and LX Semicon 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 LX Semicon 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 LX Semicon Co, you can compare the effects of market volatilities on Lotte Data and LX Semicon 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 LX Semicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and LX Semicon.
Diversification Opportunities for Lotte Data and LX Semicon
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotte and 108320 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and LX Semicon Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LX Semicon 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 LX Semicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LX Semicon has no effect on the direction of Lotte Data i.e., Lotte Data and LX Semicon go up and down completely randomly.
Pair Corralation between Lotte Data and LX Semicon
Assuming the 90 days trading horizon Lotte Data Communication is expected to generate 0.71 times more return on investment than LX Semicon. However, Lotte Data Communication is 1.42 times less risky than LX Semicon. It trades about -0.02 of its potential returns per unit of risk. LX Semicon Co is currently generating about -0.03 per unit of risk. If you would invest 1,972,000 in Lotte Data Communication on November 4, 2024 and sell it today you would lose (18,000) from holding Lotte Data Communication or give up 0.91% 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. LX Semicon Co
Performance |
| Timeline |
| Lotte Data Communication |
| LX Semicon |
Lotte Data and LX Semicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and LX Semicon
The main advantage of trading using opposite Lotte Data and LX Semicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, LX Semicon 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 LX Semicon will offset losses from the drop in LX Semicon's long position.| Lotte Data vs. Insung Information Co | Lotte Data vs. Samick Musical Instruments | Lotte Data vs. Ssangyong Information Communication | Lotte Data vs. Daesung Hi Tech Co |
| LX Semicon vs. Hyundai BNG Steel | LX Semicon vs. Ssangyong Information Communication | LX Semicon vs. Nable Communications | LX Semicon vs. Cloud Air CoLtd |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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