Correlation Between Lotte Data and DAEMO Engineering
Can any of the company-specific risk be diversified away by investing in both Lotte Data and DAEMO Engineering 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 DAEMO Engineering 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 DAEMO Engineering Co, you can compare the effects of market volatilities on Lotte Data and DAEMO Engineering 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 DAEMO Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and DAEMO Engineering.
Diversification Opportunities for Lotte Data and DAEMO Engineering
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lotte and DAEMO is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and DAEMO Engineering Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEMO Engineering 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 DAEMO Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEMO Engineering has no effect on the direction of Lotte Data i.e., Lotte Data and DAEMO Engineering go up and down completely randomly.
Pair Corralation between Lotte Data and DAEMO Engineering
Assuming the 90 days trading horizon Lotte Data Communication is expected to under-perform the DAEMO Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Lotte Data Communication is 2.13 times less risky than DAEMO Engineering. The stock trades about -0.19 of its potential returns per unit of risk. The DAEMO Engineering Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 965,000 in DAEMO Engineering Co on August 29, 2024 and sell it today you would earn a total of 48,000 from holding DAEMO Engineering Co or generate 4.97% 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. DAEMO Engineering Co
Performance |
| Timeline |
| Lotte Data Communication |
| DAEMO Engineering |
Lotte Data and DAEMO Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and DAEMO Engineering
The main advantage of trading using opposite Lotte Data and DAEMO Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data position performs unexpectedly, DAEMO Engineering 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 DAEMO Engineering will offset losses from the drop in DAEMO Engineering's long position.| Lotte Data vs. SK Holdings Co | Lotte Data vs. Daou Tech | Lotte Data vs. KT Corporation | Lotte Data vs. Samsung Heavy Industries |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |