Correlation Between Hyosung Advanced and Lotte Non
Can any of the company-specific risk be diversified away by investing in both Hyosung Advanced and Lotte Non 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 Hyosung Advanced and Lotte Non into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyosung Advanced Materials and Lotte Non Life Insurance, you can compare the effects of market volatilities on Hyosung Advanced and Lotte Non 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 Hyosung Advanced with a short position of Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Advanced and Lotte Non.
Diversification Opportunities for Hyosung Advanced and Lotte Non
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hyosung and Lotte is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Advanced Materials and Lotte Non Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Non Life and Hyosung Advanced 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 Hyosung Advanced Materials are associated (or correlated) with Lotte Non. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Non Life has no effect on the direction of Hyosung Advanced i.e., Hyosung Advanced and Lotte Non go up and down completely randomly.
Pair Corralation between Hyosung Advanced and Lotte Non
Assuming the 90 days trading horizon Hyosung Advanced Materials is expected to under-perform the Lotte Non. In addition to that, Hyosung Advanced is 1.33 times more volatile than Lotte Non Life Insurance. It trades about -0.57 of its total potential returns per unit of risk. Lotte Non Life Insurance is currently generating about -0.18 per unit of volatility. If you would invest 227,000 in Lotte Non Life Insurance on September 1, 2024 and sell it today you would lose (23,500) from holding Lotte Non Life Insurance or give up 10.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyosung Advanced Materials vs. Lotte Non Life Insurance
Performance |
| Timeline |
| Hyosung Advanced Mat |
| Lotte Non Life |
Hyosung Advanced and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyosung Advanced and Lotte Non
The main advantage of trading using opposite Hyosung Advanced and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Advanced position performs unexpectedly, Lotte Non 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 Lotte Non will offset losses from the drop in Lotte Non's long position.| Hyosung Advanced vs. Busan Industrial Co | Hyosung Advanced vs. Busan Ind | Hyosung Advanced vs. Mirae Asset Daewoo | Hyosung Advanced vs. Finebesteel |
| Lotte Non vs. AptaBio Therapeutics | Lotte Non vs. Daewoo SBI SPAC | Lotte Non vs. Dream Security co | Lotte Non vs. Microfriend |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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