Correlation Between Mobase Electronics and Lotte Energy
Can any of the company-specific risk be diversified away by investing in both Mobase Electronics and Lotte Energy 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 Mobase Electronics and Lotte Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobase Electronics CoLtd and Lotte Energy Materials, you can compare the effects of market volatilities on Mobase Electronics and Lotte Energy 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 Mobase Electronics with a short position of Lotte Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobase Electronics and Lotte Energy.
Diversification Opportunities for Mobase Electronics and Lotte Energy
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mobase and Lotte is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Mobase Electronics CoLtd and Lotte Energy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Energy Materials and Mobase Electronics 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 Mobase Electronics CoLtd are associated (or correlated) with Lotte Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Energy Materials has no effect on the direction of Mobase Electronics i.e., Mobase Electronics and Lotte Energy go up and down completely randomly.
Pair Corralation between Mobase Electronics and Lotte Energy
Assuming the 90 days trading horizon Mobase Electronics CoLtd is expected to generate 0.44 times more return on investment than Lotte Energy. However, Mobase Electronics CoLtd is 2.26 times less risky than Lotte Energy. It trades about -0.17 of its potential returns per unit of risk. Lotte Energy Materials is currently generating about -0.29 per unit of risk. If you would invest 176,400 in Mobase Electronics CoLtd on September 5, 2024 and sell it today you would lose (23,600) from holding Mobase Electronics CoLtd or give up 13.38% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.31% |
Values | Daily Returns |
Mobase Electronics CoLtd vs. Lotte Energy Materials
Performance |
Timeline |
Mobase Electronics CoLtd |
Lotte Energy Materials |
Mobase Electronics and Lotte Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mobase Electronics and Lotte Energy
The main advantage of trading using opposite Mobase Electronics and Lotte Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobase Electronics position performs unexpectedly, Lotte Energy 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 Energy will offset losses from the drop in Lotte Energy's long position.Mobase Electronics vs. Samsung Life Insurance | Mobase Electronics vs. Shinsegae Information Communication | Mobase Electronics vs. Cuckoo Electronics Co | Mobase Electronics vs. Sangsin Energy Display |
Lotte Energy vs. Daishin Information Communications | Lotte Energy vs. Daou Data Corp | Lotte Energy vs. PJ Metal Co | Lotte Energy vs. DataSolution |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |