Correlation Between Coloray International and Lotte Non
Can any of the company-specific risk be diversified away by investing in both Coloray International 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 Coloray International and Lotte Non into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloray International Investment and Lotte Non Life Insurance, you can compare the effects of market volatilities on Coloray International 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 Coloray International with a short position of Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloray International and Lotte Non.
Diversification Opportunities for Coloray International and Lotte Non
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Coloray and Lotte is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Coloray International Investme 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 Coloray International 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 Coloray International Investment 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 Coloray International i.e., Coloray International and Lotte Non go up and down completely randomly.
Pair Corralation between Coloray International and Lotte Non
Assuming the 90 days trading horizon Coloray International Investment is expected to under-perform the Lotte Non. But the stock apears to be less risky and, when comparing its historical volatility, Coloray International Investment is 1.43 times less risky than Lotte Non. The stock trades about -0.05 of its potential returns per unit of risk. The Lotte Non Life Insurance is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 181,200 in Lotte Non Life Insurance on September 4, 2024 and sell it today you would earn a total of 23,800 from holding Lotte Non Life Insurance or generate 13.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coloray International Investme vs. Lotte Non Life Insurance
Performance |
| Timeline |
| Coloray International |
| Lotte Non Life |
Coloray International and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloray International and Lotte Non
The main advantage of trading using opposite Coloray International and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloray International 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.| Coloray International vs. LG Chem | Coloray International vs. DukSan Neolux CoLtd | Coloray International vs. Hyosung Chemical Corp | Coloray International vs. LIG ES SPAC |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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