Correlation Between Sungwoo Electronics and Doosan Fuel
Can any of the company-specific risk be diversified away by investing in both Sungwoo Electronics 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 Sungwoo Electronics and Doosan Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungwoo Electronics Co and Doosan Fuel Cell, you can compare the effects of market volatilities on Sungwoo Electronics 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 Sungwoo Electronics with a short position of Doosan Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungwoo Electronics and Doosan Fuel.
Diversification Opportunities for Sungwoo Electronics and Doosan Fuel
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sungwoo and Doosan is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sungwoo Electronics Co 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 Sungwoo Electronics 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 Sungwoo Electronics Co 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 Sungwoo Electronics i.e., Sungwoo Electronics and Doosan Fuel go up and down completely randomly.
Pair Corralation between Sungwoo Electronics and Doosan Fuel
Assuming the 90 days trading horizon Sungwoo Electronics Co is expected to generate 0.89 times more return on investment than Doosan Fuel. However, Sungwoo Electronics Co is 1.12 times less risky than Doosan Fuel. It trades about 0.08 of its potential returns per unit of risk. Doosan Fuel Cell is currently generating about -0.02 per unit of risk. If you would invest 220,500 in Sungwoo Electronics Co on September 14, 2024 and sell it today you would earn a total of 127,000 from holding Sungwoo Electronics Co or generate 57.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.39% |
| Values | Daily Returns |
Sungwoo Electronics Co vs. Doosan Fuel Cell
Performance |
| Timeline |
| Sungwoo Electronics |
| Doosan Fuel Cell |
Sungwoo Electronics and Doosan Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungwoo Electronics and Doosan Fuel
The main advantage of trading using opposite Sungwoo Electronics and Doosan Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungwoo Electronics 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.| Sungwoo Electronics vs. Samsung Electronics Co | Sungwoo Electronics vs. Samsung Electronics Co | Sungwoo Electronics vs. SK Hynix | Sungwoo Electronics vs. POSCO Holdings |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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