Correlation Between Lotte Data and Xavis
Can any of the company-specific risk be diversified away by investing in both Lotte Data and Xavis 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 Xavis 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 Xavis Co, you can compare the effects of market volatilities on Lotte Data and Xavis 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 Xavis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and Xavis.
Diversification Opportunities for Lotte Data and Xavis
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotte and Xavis is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and Xavis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xavis 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 Xavis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xavis has no effect on the direction of Lotte Data i.e., Lotte Data and Xavis go up and down completely randomly.
Pair Corralation between Lotte Data and Xavis
Assuming the 90 days trading horizon Lotte Data Communication is expected to under-perform the Xavis. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Data Communication is 1.42 times less risky than Xavis. The stock trades about 0.0 of its potential returns per unit of risk. The Xavis Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 207,628 in Xavis Co on October 25, 2024 and sell it today you would lose (74,728) from holding Xavis Co or give up 35.99% 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. Xavis Co
Performance |
| Timeline |
| Lotte Data Communication |
| Xavis |
Lotte Data and Xavis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and Xavis
The main advantage of trading using opposite Lotte Data and Xavis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, Xavis 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 Xavis will offset losses from the drop in Xavis' long position.| Lotte Data vs. SK Holdings Co | Lotte Data vs. Busan Industrial Co | Lotte Data vs. Busan Ind | Lotte Data vs. RPBio Inc |
| Xavis vs. KT Submarine Telecom | Xavis vs. Samji Electronics Co | Xavis vs. Nable Communications | Xavis vs. Sejong Telecom |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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