Correlation Between DONGKUK TED and Lotte Chilsung
Can any of the company-specific risk be diversified away by investing in both DONGKUK TED and Lotte Chilsung 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 DONGKUK TED and Lotte Chilsung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DONGKUK TED METAL and Lotte Chilsung Beverage, you can compare the effects of market volatilities on DONGKUK TED and Lotte Chilsung 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 DONGKUK TED with a short position of Lotte Chilsung. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGKUK TED and Lotte Chilsung.
Diversification Opportunities for DONGKUK TED and Lotte Chilsung
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DONGKUK and Lotte is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding DONGKUK TED METAL and Lotte Chilsung Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chilsung Beverage and DONGKUK TED 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 DONGKUK TED METAL are associated (or correlated) with Lotte Chilsung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chilsung Beverage has no effect on the direction of DONGKUK TED i.e., DONGKUK TED and Lotte Chilsung go up and down completely randomly.
Pair Corralation between DONGKUK TED and Lotte Chilsung
Assuming the 90 days trading horizon DONGKUK TED METAL is expected to under-perform the Lotte Chilsung. In addition to that, DONGKUK TED is 1.85 times more volatile than Lotte Chilsung Beverage. It trades about -0.08 of its total potential returns per unit of risk. Lotte Chilsung Beverage is currently generating about -0.05 per unit of volatility. If you would invest 10,871,900 in Lotte Chilsung Beverage on January 22, 2025 and sell it today you would lose (171,900) from holding Lotte Chilsung Beverage or give up 1.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGKUK TED METAL vs. Lotte Chilsung Beverage
Performance |
| Timeline |
| DONGKUK TED METAL |
| Lotte Chilsung Beverage |
DONGKUK TED and Lotte Chilsung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGKUK TED and Lotte Chilsung
The main advantage of trading using opposite DONGKUK TED and Lotte Chilsung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGKUK TED position performs unexpectedly, Lotte Chilsung 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 Chilsung will offset losses from the drop in Lotte Chilsung's long position.| DONGKUK TED vs. Samsung Electronics Co | DONGKUK TED vs. Samsung Electronics Co | DONGKUK TED vs. LG Energy Solution | DONGKUK TED vs. SK Hynix |
| Lotte Chilsung vs. NAU IB Capital | Lotte Chilsung vs. Samsung Special Purpose | Lotte Chilsung vs. Busan Industrial Co | Lotte Chilsung vs. Finebesteel |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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