Correlation Between Bitcoin and Lotte Rental
Can any of the company-specific risk be diversified away by investing in both Bitcoin and Lotte Rental 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 Bitcoin and Lotte Rental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Lotte Rental Co, you can compare the effects of market volatilities on Bitcoin and Lotte Rental 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 Bitcoin with a short position of Lotte Rental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Lotte Rental.
Diversification Opportunities for Bitcoin and Lotte Rental
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bitcoin and Lotte is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Lotte Rental Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Rental and Bitcoin 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 Bitcoin are associated (or correlated) with Lotte Rental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Rental has no effect on the direction of Bitcoin i.e., Bitcoin and Lotte Rental go up and down completely randomly.
Pair Corralation between Bitcoin and Lotte Rental
Assuming the 90 days trading horizon Bitcoin is expected to generate 1.79 times more return on investment than Lotte Rental. However, Bitcoin is 1.79 times more volatile than Lotte Rental Co. It trades about -0.09 of its potential returns per unit of risk. Lotte Rental Co is currently generating about -0.22 per unit of risk. If you would invest 10,004,200 in Bitcoin on October 12, 2024 and sell it today you would lose (533,020) from holding Bitcoin or give up 5.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Bitcoin vs. Lotte Rental Co
Performance |
| Timeline |
| Bitcoin |
| Lotte Rental |
Bitcoin and Lotte Rental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Lotte Rental
The main advantage of trading using opposite Bitcoin and Lotte Rental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Lotte Rental 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 Rental will offset losses from the drop in Lotte Rental's long position.The idea behind Bitcoin and Lotte Rental Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lotte Rental vs. Samsung Electronics Co | Lotte Rental vs. Samsung Electronics Co | Lotte Rental vs. LG Energy Solution | Lotte Rental vs. SK Hynix |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |