Correlation Between Doosan and LB Investment
Can any of the company-specific risk be diversified away by investing in both Doosan and LB Investment 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 Doosan and LB Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Doosan and LB Investment, you can compare the effects of market volatilities on Doosan and LB Investment 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 Doosan with a short position of LB Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doosan and LB Investment.
Diversification Opportunities for Doosan and LB Investment
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Doosan and 309960 is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Doosan and LB Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Investment and Doosan 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 Doosan are associated (or correlated) with LB Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LB Investment has no effect on the direction of Doosan i.e., Doosan and LB Investment go up and down completely randomly.
Pair Corralation between Doosan and LB Investment
Assuming the 90 days trading horizon Doosan is expected to generate 1.17 times more return on investment than LB Investment. However, Doosan is 1.17 times more volatile than LB Investment. It trades about 0.07 of its potential returns per unit of risk. LB Investment is currently generating about -0.05 per unit of risk. If you would invest 8,380,159 in Doosan on September 12, 2024 and sell it today you would earn a total of 13,619,841 from holding Doosan or generate 162.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.34% |
| Values | Daily Returns |
Doosan vs. LB Investment
Performance |
| Timeline |
| Doosan |
| LB Investment |
Doosan and LB Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doosan and LB Investment
The main advantage of trading using opposite Doosan and LB Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doosan position performs unexpectedly, LB Investment 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 LB Investment will offset losses from the drop in LB Investment's long position.| Doosan vs. Sejong Telecom | Doosan vs. BooKook Steel Co | Doosan vs. Han Kook Steel | Doosan vs. Kisan Telecom Co |
| LB Investment vs. Samsung Electronics Co | LB Investment vs. Samsung Electronics Co | LB Investment vs. LG Energy Solution | LB Investment vs. SK Hynix |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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