Correlation Between Lotte Data and Genolution

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

By analyzing existing cross correlation between Lotte Data Communication and Genolution, you can compare the effects of market volatilities on Lotte Data and Genolution 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 Data with a short position of Genolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and Genolution.

Diversification Opportunities for Lotte Data and Genolution

0.0

Correlation Coefficient

Lotte Data  Genolution

Pay attention - limited upside

The 3 months correlation between Lotte and Genolution is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication and Genolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genolution and Lotte Data 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 Data Communication are associated (or correlated) with Genolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genolution has no effect on the direction of Lotte Data i.e., Lotte Data and Genolution go up and down completely randomly.

Pair Corralation between Lotte Data and Genolution

If you would invest  1,986,000  in Lotte Data Communication on October 15, 2024 and sell it today you would earn a total of  104,000  from holding Lotte Data Communication or generate 5.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Lotte Data Communication  vs.  Genolution

Lotte Data Communication

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lotte Data Communication has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Lotte Data is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Genolution

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genolution has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Genolution is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lotte Data and Genolution

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

The idea behind Lotte Data Communication and Genolution 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.