Correlation Between Micron Technology and Lotte Reit
Can any of the company-specific risk be diversified away by investing in both Micron Technology 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 Micron Technology and Lotte Reit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and Lotte Reit Co, you can compare the effects of market volatilities on Micron Technology 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 Micron Technology with a short position of Lotte Reit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Lotte Reit.
Diversification Opportunities for Micron Technology and Lotte Reit
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Micron and Lotte is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Lotte Reit Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Reit and Micron Technology 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 Micron Technology 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 Micron Technology i.e., Micron Technology and Lotte Reit go up and down completely randomly.
Pair Corralation between Micron Technology and Lotte Reit
Allowing for the 90-day total investment horizon Micron Technology is expected to under-perform the Lotte Reit. In addition to that, Micron Technology is 1.28 times more volatile than Lotte Reit Co. It trades about -0.07 of its total potential returns per unit of risk. Lotte Reit Co is currently generating about -0.06 per unit of volatility. If you would invest 319,000 in Lotte Reit Co on September 13, 2024 and sell it today you would lose (10,500) from holding Lotte Reit Co or give up 3.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Micron Technology vs. Lotte Reit Co
Performance |
| Timeline |
| Micron Technology |
| Lotte Reit |
Micron Technology and Lotte Reit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and Lotte Reit
The main advantage of trading using opposite Micron Technology and Lotte Reit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology 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.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
| Lotte Reit vs. SK Telecom Co | Lotte Reit vs. Hankuk Steel Wire | Lotte Reit vs. Wonil Special Steel | Lotte Reit vs. Nable Communications |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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