Correlation Between Dow Jones and Lotte Reit
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Lotte Reit 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 Dow Jones and Lotte Reit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Lotte Reit Co, you can compare the effects of market volatilities on Dow Jones and Lotte Reit 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 Dow Jones with a short position of Lotte Reit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Lotte Reit.
Diversification Opportunities for Dow Jones and Lotte Reit
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dow and Lotte is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Lotte Reit Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Reit and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Lotte Reit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Reit has no effect on the direction of Dow Jones i.e., Dow Jones and Lotte Reit go up and down completely randomly.
Pair Corralation between Dow Jones and Lotte Reit
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.36 times less return on investment than Lotte Reit. But when comparing it to its historical volatility, Dow Jones Industrial is 1.97 times less risky than Lotte Reit. It trades about 0.07 of its potential returns per unit of risk. Lotte Reit Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 304,566 in Lotte Reit Co on December 2, 2024 and sell it today you would earn a total of 46,934 from holding Lotte Reit Co or generate 15.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.97% |
| Values | Daily Returns |
Dow Jones Industrial vs. Lotte Reit Co
Performance |
| Timeline |
Dow Jones and Lotte Reit Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Lotte Reit Co
Pair trading matchups for Lotte Reit
Pair Trading with Dow Jones and Lotte Reit
The main advantage of trading using opposite Dow Jones and Lotte Reit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Lotte Reit 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 Reit will offset losses from the drop in Lotte Reit's long position.| Dow Jones vs. Antero Midstream Partners | Dow Jones vs. Evergy, | Dow Jones vs. PPL Corporation | Dow Jones vs. China Resources Beer |
| Lotte Reit vs. Korea Investment Holdings | Lotte Reit vs. Coloray International Investment | Lotte Reit vs. Daol Investment Securities | Lotte Reit vs. Sam Yang Foods |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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