Correlation Between Access Bio and Lotte Data
Can any of the company-specific risk be diversified away by investing in both Access Bio and Lotte Data 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 Access Bio and Lotte Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Access Bio and Lotte Data Communication, you can compare the effects of market volatilities on Access Bio and Lotte Data 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 Access Bio with a short position of Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Access Bio and Lotte Data.
Diversification Opportunities for Access Bio and Lotte Data
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Access and Lotte is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Access Bio and Lotte Data Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Data Communication and Access Bio 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 Access Bio are associated (or correlated) with Lotte Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Data Communication has no effect on the direction of Access Bio i.e., Access Bio and Lotte Data go up and down completely randomly.
Pair Corralation between Access Bio and Lotte Data
Assuming the 90 days trading horizon Access Bio is expected to generate 1.04 times more return on investment than Lotte Data. However, Access Bio is 1.04 times more volatile than Lotte Data Communication. It trades about -0.06 of its potential returns per unit of risk. Lotte Data Communication is currently generating about -0.19 per unit of risk. If you would invest 602,000 in Access Bio on August 28, 2024 and sell it today you would lose (24,000) from holding Access Bio or give up 3.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Access Bio vs. Lotte Data Communication
Performance |
| Timeline |
| Access Bio |
| Lotte Data Communication |
Access Bio and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Access Bio and Lotte Data
The main advantage of trading using opposite Access Bio and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Access Bio position performs unexpectedly, Lotte Data 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 Data will offset losses from the drop in Lotte Data's long position.| Access Bio vs. Dongbang Transport Logistics | Access Bio vs. Taegu Broadcasting | Access Bio vs. Ssangyong Information Communication | Access Bio vs. Nable Communications |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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