Correlation Between Lotte Data and HyVision System
Can any of the company-specific risk be diversified away by investing in both Lotte Data and HyVision System 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 HyVision System 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 HyVision System, you can compare the effects of market volatilities on Lotte Data and HyVision System 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 HyVision System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and HyVision System.
Diversification Opportunities for Lotte Data and HyVision System
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotte and HyVision is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and HyVision System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HyVision System 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 HyVision System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HyVision System has no effect on the direction of Lotte Data i.e., Lotte Data and HyVision System go up and down completely randomly.
Pair Corralation between Lotte Data and HyVision System
Assuming the 90 days trading horizon Lotte Data is expected to generate 1.62 times less return on investment than HyVision System. In addition to that, Lotte Data is 1.01 times more volatile than HyVision System. It trades about 0.01 of its total potential returns per unit of risk. HyVision System is currently generating about 0.01 per unit of volatility. If you would invest 1,876,219 in HyVision System on September 14, 2024 and sell it today you would lose (155,219) from holding HyVision System or give up 8.27% 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. HyVision System
Performance |
| Timeline |
| Lotte Data Communication |
| HyVision System |
Lotte Data and HyVision System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and HyVision System
The main advantage of trading using opposite Lotte Data and HyVision System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, HyVision System 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 HyVision System will offset losses from the drop in HyVision System's long position.| Lotte Data vs. SK Holdings Co | Lotte Data vs. Solution Advanced Technology | Lotte Data vs. Busan Industrial Co | Lotte Data vs. Busan Ind |
| HyVision System vs. BGF Retail Co | HyVision System vs. DB Insurance Co | HyVision System vs. Lotte Data Communication | HyVision System vs. Kisan Telecom 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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