Correlation Between Organic Special and Lotte Chilsung
Can any of the company-specific risk be diversified away by investing in both Organic Special and Lotte Chilsung 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 Organic Special and Lotte Chilsung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Organic Special Pet and Lotte Chilsung Beverage, you can compare the effects of market volatilities on Organic Special and Lotte Chilsung 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 Organic Special with a short position of Lotte Chilsung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Organic Special and Lotte Chilsung.
Diversification Opportunities for Organic Special and Lotte Chilsung
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Organic and Lotte is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Organic Special Pet and Lotte Chilsung Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chilsung Beverage and Organic Special 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 Organic Special Pet are associated (or correlated) with Lotte Chilsung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chilsung Beverage has no effect on the direction of Organic Special i.e., Organic Special and Lotte Chilsung go up and down completely randomly.
Pair Corralation between Organic Special and Lotte Chilsung
Assuming the 90 days trading horizon Organic Special Pet is expected to under-perform the Lotte Chilsung. In addition to that, Organic Special is 1.37 times more volatile than Lotte Chilsung Beverage. It trades about -0.17 of its total potential returns per unit of risk. Lotte Chilsung Beverage is currently generating about -0.12 per unit of volatility. If you would invest 13,320,000 in Lotte Chilsung Beverage on September 25, 2024 and sell it today you would lose (1,610,000) from holding Lotte Chilsung Beverage or give up 12.09% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Organic Special Pet vs. Lotte Chilsung Beverage
Performance |
Timeline |
Organic Special Pet |
Lotte Chilsung Beverage |
Organic Special and Lotte Chilsung Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Organic Special and Lotte Chilsung
The main advantage of trading using opposite Organic Special and Lotte Chilsung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Organic Special position performs unexpectedly, Lotte Chilsung 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 Chilsung will offset losses from the drop in Lotte Chilsung's long position.Organic Special vs. LG Household Healthcare | Organic Special vs. Samsung Life Insurance | Organic Special vs. Aprogen Healthcare Games | Organic Special vs. DONGKUK TED METAL |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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