Correlation Between Organic Special and Lotte Non
Can any of the company-specific risk be diversified away by investing in both Organic Special 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 Organic Special and Lotte Non into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Organic Special Pet and Lotte Non Life, you can compare the effects of market volatilities on Organic Special 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 Organic Special with a short position of Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of Organic Special and Lotte Non.
Diversification Opportunities for Organic Special and Lotte Non
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Organic and Lotte is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Organic Special Pet and Lotte Non Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Non Life and Organic Special 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 Organic Special Pet 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 Organic Special i.e., Organic Special and Lotte Non go up and down completely randomly.
Pair Corralation between Organic Special and Lotte Non
Assuming the 90 days trading horizon Organic Special Pet is expected to under-perform the Lotte Non. In addition to that, Organic Special is 1.15 times more volatile than Lotte Non Life. It trades about -0.16 of its total potential returns per unit of risk. Lotte Non Life is currently generating about 0.0 per unit of volatility. If you would invest 204,500 in Lotte Non Life on October 22, 2024 and sell it today you would lose (500.00) from holding Lotte Non Life or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Organic Special Pet vs. Lotte Non Life
Performance |
| Timeline |
| Organic Special Pet |
| Lotte Non Life |
Organic Special and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Organic Special and Lotte Non
The main advantage of trading using opposite Organic Special and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Organic Special 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.| Organic Special vs. Playgram Co | Organic Special vs. Alton Sports CoLtd | Organic Special vs. Samyung Trading Co | Organic Special vs. PlayD Co |
| Lotte Non vs. DoubleU Games Co | Lotte Non vs. Nice Information Telecommunication | Lotte Non vs. Korea Alcohol Industrial | Lotte Non vs. Daishin Information Communications |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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