Correlation Between Kosdaq Composite and Lotte Non
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By analyzing existing cross correlation between Kosdaq Composite Index and Lotte Non Life, you can compare the effects of market volatilities on Kosdaq Composite 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 Kosdaq Composite with a short position of Lotte Non. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Lotte Non.
Diversification Opportunities for Kosdaq Composite and Lotte Non
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kosdaq and Lotte is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Lotte Non Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Non Life and Kosdaq Composite 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 Kosdaq Composite Index 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 Kosdaq Composite i.e., Kosdaq Composite and Lotte Non go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Lotte Non
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to generate 0.54 times more return on investment than Lotte Non. However, Kosdaq Composite Index is 1.86 times less risky than Lotte Non. It trades about -0.17 of its potential returns per unit of risk. Lotte Non Life is currently generating about -0.21 per unit of risk. If you would invest 76,388 in Kosdaq Composite Index on August 29, 2024 and sell it today you would lose (7,175) from holding Kosdaq Composite Index or give up 9.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. Lotte Non Life
Performance |
| Timeline |
Kosdaq Composite and Lotte Non Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Lotte Non Life
Pair trading matchups for Lotte Non
Pair Trading with Kosdaq Composite and Lotte Non
The main advantage of trading using opposite Kosdaq Composite and Lotte Non positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite 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.| Kosdaq Composite vs. Korea Air Svc | Kosdaq Composite vs. Mobileleader CoLtd | Kosdaq Composite vs. Ssangyong Information Communication | Kosdaq Composite vs. TOPMATERIAL LTD |
| Lotte Non vs. Daou Data Corp | Lotte Non vs. Alton Sports CoLtd | Lotte Non vs. Display Tech Co | Lotte Non vs. Sangsin Energy Display |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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