Correlation Between Seojin Automotive and Lotte Energy
Can any of the company-specific risk be diversified away by investing in both Seojin Automotive 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 Seojin Automotive and Lotte Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seojin Automotive CoLtd and Lotte Energy Materials, you can compare the effects of market volatilities on Seojin Automotive 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 Seojin Automotive with a short position of Lotte Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seojin Automotive and Lotte Energy.
Diversification Opportunities for Seojin Automotive and Lotte Energy
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Seojin and Lotte is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Seojin Automotive 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 Seojin Automotive 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 Seojin Automotive 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 Seojin Automotive i.e., Seojin Automotive and Lotte Energy go up and down completely randomly.
Pair Corralation between Seojin Automotive and Lotte Energy
Assuming the 90 days trading horizon Seojin Automotive CoLtd is expected to generate 0.55 times more return on investment than Lotte Energy. However, Seojin Automotive CoLtd is 1.82 times less risky than Lotte Energy. It trades about -0.2 of its potential returns per unit of risk. Lotte Energy Materials is currently generating about -0.27 per unit of risk. If you would invest 240,000 in Seojin Automotive CoLtd on September 6, 2024 and sell it today you would lose (43,200) from holding Seojin Automotive CoLtd or give up 18.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Seojin Automotive CoLtd vs. Lotte Energy Materials
Performance |
Timeline |
Seojin Automotive CoLtd |
Lotte Energy Materials |
Seojin Automotive and Lotte Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Seojin Automotive and Lotte Energy
The main advantage of trading using opposite Seojin Automotive and Lotte Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seojin Automotive 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.Seojin Automotive vs. Samlip General Foods | Seojin Automotive vs. Miwon Chemicals Co | Seojin Automotive vs. Daejung Chemicals Metals | Seojin Automotive vs. Formetal Co |
Lotte Energy vs. UJU Electronics Co | Lotte Energy vs. LG Electronics | Lotte Energy vs. NH Investment Securities | Lotte Energy vs. LB 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
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 | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |