Correlation Between Namyang Dairy and Doosan Fuel
Can any of the company-specific risk be diversified away by investing in both Namyang Dairy 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 Namyang Dairy and Doosan Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namyang Dairy and Doosan Fuel Cell, you can compare the effects of market volatilities on Namyang Dairy 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 Namyang Dairy with a short position of Doosan Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namyang Dairy and Doosan Fuel.
Diversification Opportunities for Namyang Dairy and Doosan Fuel
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Namyang and Doosan is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Namyang Dairy 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 Namyang Dairy 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 Namyang Dairy 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 Namyang Dairy i.e., Namyang Dairy and Doosan Fuel go up and down completely randomly.
Pair Corralation between Namyang Dairy and Doosan Fuel
Assuming the 90 days trading horizon Namyang Dairy is expected to generate 32.99 times more return on investment than Doosan Fuel. However, Namyang Dairy is 32.99 times more volatile than Doosan Fuel Cell. It trades about 0.12 of its potential returns per unit of risk. Doosan Fuel Cell is currently generating about -0.03 per unit of risk. If you would invest 5,200,000 in Namyang Dairy on September 12, 2024 and sell it today you would earn a total of 940,000 from holding Namyang Dairy or generate 18.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.28% |
| Values | Daily Returns |
Namyang Dairy vs. Doosan Fuel Cell
Performance |
| Timeline |
| Namyang Dairy |
| Doosan Fuel Cell |
Namyang Dairy and Doosan Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namyang Dairy and Doosan Fuel
The main advantage of trading using opposite Namyang Dairy and Doosan Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namyang Dairy 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.| Namyang Dairy vs. Korea New Network | Namyang Dairy vs. ICD Co | Namyang Dairy vs. DYPNF CoLtd | Namyang Dairy vs. Solution Advanced Technology |
| Doosan Fuel vs. SAMG Entertainment Co | Doosan Fuel vs. ChipsMedia | Doosan Fuel vs. Daewon Media Co | Doosan Fuel vs. KIWI Media Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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