Correlation Between Stic Investments and Doosan
Can any of the company-specific risk be diversified away by investing in both Stic Investments and Doosan 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 Stic Investments and Doosan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stic Investments and Doosan, you can compare the effects of market volatilities on Stic Investments and Doosan 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 Stic Investments with a short position of Doosan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stic Investments and Doosan.
Diversification Opportunities for Stic Investments and Doosan
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stic and Doosan is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and Doosan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan and Stic Investments 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 Stic Investments are associated (or correlated) with Doosan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doosan has no effect on the direction of Stic Investments i.e., Stic Investments and Doosan go up and down completely randomly.
Pair Corralation between Stic Investments and Doosan
Assuming the 90 days trading horizon Stic Investments is expected to generate 2.24 times less return on investment than Doosan. But when comparing it to its historical volatility, Stic Investments is 1.79 times less risky than Doosan. It trades about 0.06 of its potential returns per unit of risk. Doosan is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7,985,232 in Doosan on September 16, 2024 and sell it today you would earn a total of 16,464,768 from holding Doosan or generate 206.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stic Investments vs. Doosan
Performance |
| Timeline |
| Stic Investments |
| Doosan |
Stic Investments and Doosan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stic Investments and Doosan
The main advantage of trading using opposite Stic Investments and Doosan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stic Investments position performs unexpectedly, Doosan 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 will offset losses from the drop in Doosan's long position.| Stic Investments vs. Cube Entertainment | Stic Investments vs. Dreamus Company | Stic Investments vs. LG Energy Solution | Stic Investments vs. Dongwon System |
| Doosan vs. NH Investment Securities | Doosan vs. Hanshin Construction Co | Doosan vs. Stic Investments | Doosan vs. Seoam Machinery Industry |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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