Correlation Between Sangsangin Investment and Doosan Fuel
Can any of the company-specific risk be diversified away by investing in both Sangsangin Investment and Doosan Fuel 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 Sangsangin Investment and Doosan Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sangsangin Investment Securities and Doosan Fuel Cell, you can compare the effects of market volatilities on Sangsangin Investment and Doosan Fuel 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 Sangsangin Investment with a short position of Doosan Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsangin Investment and Doosan Fuel.
Diversification Opportunities for Sangsangin Investment and Doosan Fuel
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sangsangin and Doosan is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sangsangin Investment Securiti and Doosan Fuel Cell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan Fuel Cell and Sangsangin Investment 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 Sangsangin Investment Securities are associated (or correlated) with Doosan Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doosan Fuel Cell has no effect on the direction of Sangsangin Investment i.e., Sangsangin Investment and Doosan Fuel go up and down completely randomly.
Pair Corralation between Sangsangin Investment and Doosan Fuel
Assuming the 90 days trading horizon Sangsangin Investment Securities is expected to generate 0.43 times more return on investment than Doosan Fuel. However, Sangsangin Investment Securities is 2.31 times less risky than Doosan Fuel. It trades about -0.22 of its potential returns per unit of risk. Doosan Fuel Cell is currently generating about -0.14 per unit of risk. If you would invest 47,000 in Sangsangin Investment Securities on August 26, 2024 and sell it today you would lose (3,500) from holding Sangsangin Investment Securities or give up 7.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangsangin Investment Securiti vs. Doosan Fuel Cell
Performance |
| Timeline |
| Sangsangin Investment |
| Doosan Fuel Cell |
Sangsangin Investment and Doosan Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsangin Investment and Doosan Fuel
The main advantage of trading using opposite Sangsangin Investment and Doosan Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsangin Investment position performs unexpectedly, Doosan Fuel 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 Doosan Fuel will offset losses from the drop in Doosan Fuel's long position.| Sangsangin Investment vs. Korea New Network | Sangsangin Investment vs. Dong A Eltek | Sangsangin Investment vs. Dreamus Company | Sangsangin Investment vs. SK Bioscience Co |
| Doosan Fuel vs. Hannong Chemicals | Doosan Fuel vs. Sangsangin Investment Securities | Doosan Fuel vs. Kukdong Oil Chemicals | Doosan Fuel vs. LG Chemicals |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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