Correlation Between Lotte Energy and Daishin Information
Can any of the company-specific risk be diversified away by investing in both Lotte Energy and Daishin Information 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 Energy and Daishin Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Energy Materials and Daishin Information Communications, you can compare the effects of market volatilities on Lotte Energy and Daishin Information 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 Energy with a short position of Daishin Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Energy and Daishin Information.
Diversification Opportunities for Lotte Energy and Daishin Information
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lotte and Daishin is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Energy Materials and Daishin Information Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Information and Lotte Energy 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 Energy Materials are associated (or correlated) with Daishin Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Information has no effect on the direction of Lotte Energy i.e., Lotte Energy and Daishin Information go up and down completely randomly.
Pair Corralation between Lotte Energy and Daishin Information
Assuming the 90 days trading horizon Lotte Energy Materials is expected to under-perform the Daishin Information. In addition to that, Lotte Energy is 1.73 times more volatile than Daishin Information Communications. It trades about -0.28 of its total potential returns per unit of risk. Daishin Information Communications is currently generating about 0.05 per unit of volatility. If you would invest 86,500 in Daishin Information Communications on September 9, 2024 and sell it today you would earn a total of 4,100 from holding Daishin Information Communications or generate 4.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Lotte Energy Materials vs. Daishin Information Communicat
Performance |
Timeline |
Lotte Energy Materials |
Daishin Information |
Lotte Energy and Daishin Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lotte Energy and Daishin Information
The main advantage of trading using opposite Lotte Energy and Daishin Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Energy position performs unexpectedly, Daishin Information 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 Daishin Information will offset losses from the drop in Daishin Information's long position.Lotte Energy vs. Dongbu Insurance Co | Lotte Energy vs. Hana Financial | Lotte Energy vs. Wireless Power Amplifier | Lotte Energy vs. BNK Financial Group |
Daishin Information vs. CU Medical Systems | Daishin Information vs. KEPCO Engineering Construction | Daishin Information vs. HJ ShipBuilding Construction | Daishin Information vs. BGF Retail Co |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |