Correlation Between Lotte Data and SillaJen
Can any of the company-specific risk be diversified away by investing in both Lotte Data and SillaJen 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 SillaJen 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 SillaJen, you can compare the effects of market volatilities on Lotte Data and SillaJen 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 SillaJen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and SillaJen.
Diversification Opportunities for Lotte Data and SillaJen
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lotte and SillaJen is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and SillaJen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SillaJen 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 SillaJen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SillaJen has no effect on the direction of Lotte Data i.e., Lotte Data and SillaJen go up and down completely randomly.
Pair Corralation between Lotte Data and SillaJen
Assuming the 90 days trading horizon Lotte Data Communication is expected to under-perform the SillaJen. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Data Communication is 1.02 times less risky than SillaJen. The stock trades about -0.09 of its potential returns per unit of risk. The SillaJen is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 441,036 in SillaJen on November 7, 2024 and sell it today you would lose (184,536) from holding SillaJen or give up 41.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lotte Data Communication vs. SillaJen
Performance |
| Timeline |
| Lotte Data Communication |
| SillaJen |
Lotte Data and SillaJen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and SillaJen
The main advantage of trading using opposite Lotte Data and SillaJen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, SillaJen 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 SillaJen will offset losses from the drop in SillaJen's long position.| Lotte Data vs. HB Technology TD | Lotte Data vs. Daou Technology | Lotte Data vs. Korea Shipbuilding Offshore | Lotte Data vs. AeroSpace Technology of |
| SillaJen vs. ADTechnology CoLtd | SillaJen vs. BIT Computer Co | SillaJen vs. Raontech | SillaJen vs. SS TECH |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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