Correlation Between Lotte Fine and Kyung In

Can any of the company-specific risk be diversified away by investing in both Lotte Fine and Kyung In 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 Lotte Fine and Kyung In into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lotte Fine Chemical and Kyung In Synthetic Corp, you can compare the effects of market volatilities on Lotte Fine and Kyung In 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 Lotte Fine with a short position of Kyung In. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Fine and Kyung In.

Diversification Opportunities for Lotte Fine and Kyung In

0.7

Correlation Coefficient

Lotte Fine  Kyung In

Poor diversification

The 3 months correlation between Lotte and Kyung is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Fine Chemical and Kyung In Synthetic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyung In Synthetic and Lotte Fine 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 Lotte Fine Chemical are associated (or correlated) with Kyung In. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyung In Synthetic has no effect on the direction of Lotte Fine i.e., Lotte Fine and Kyung In go up and down completely randomly.

Pair Corralation between Lotte Fine and Kyung In

Assuming the 90 days trading horizon Lotte Fine is expected to generate 2.92 times less return on investment than Kyung In. In addition to that, Lotte Fine is 1.46 times more volatile than Kyung In Synthetic Corp. It trades about 0.02 of its total potential returns per unit of risk. Kyung In Synthetic Corp is currently generating about 0.1 per unit of volatility. If you would invest  274,946  in Kyung In Synthetic Corp on December 23, 2024 and sell it today you would earn a total of  22,054  from holding Kyung In Synthetic Corp or generate 8.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Lotte Fine Chemical  vs.  Kyung In Synthetic Corp

Lotte Fine Chemical

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lotte Fine Chemical are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Lotte Fine is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kyung In Synthetic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kyung In Synthetic Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kyung In may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Lotte Fine and Kyung In

The main advantage of trading using opposite Lotte Fine and Kyung In positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Fine position performs unexpectedly, Kyung In 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 Kyung In will offset losses from the drop in Kyung In's long position.

The idea behind Lotte Fine Chemical and Kyung In Synthetic Corp 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.