Correlation Between LX Semicon and Doosan Fuel
Can any of the company-specific risk be diversified away by investing in both LX Semicon 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 LX Semicon and Doosan Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LX Semicon Co and Doosan Fuel Cell, you can compare the effects of market volatilities on LX Semicon 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 LX Semicon with a short position of Doosan Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of LX Semicon and Doosan Fuel.
Diversification Opportunities for LX Semicon and Doosan Fuel
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 108320 and Doosan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding LX Semicon 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 LX Semicon 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 LX Semicon 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 LX Semicon i.e., LX Semicon and Doosan Fuel go up and down completely randomly.
Pair Corralation between LX Semicon and Doosan Fuel
Assuming the 90 days trading horizon LX Semicon Co is expected to under-perform the Doosan Fuel. But the stock apears to be less risky and, when comparing its historical volatility, LX Semicon Co is 3.13 times less risky than Doosan Fuel. The stock trades about -0.41 of its potential returns per unit of risk. The Doosan Fuel Cell is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,767,000 in Doosan Fuel Cell on September 3, 2024 and sell it today you would earn a total of 79,000 from holding Doosan Fuel Cell or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LX Semicon Co vs. Doosan Fuel Cell
Performance |
| Timeline |
| LX Semicon |
| Doosan Fuel Cell |
LX Semicon and Doosan Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LX Semicon and Doosan Fuel
The main advantage of trading using opposite LX Semicon and Doosan Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LX Semicon 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.| LX Semicon vs. Dongsin Engineering Construction | LX Semicon vs. Doosan Fuel Cell | LX Semicon vs. Daishin Balance 1 | LX Semicon vs. Total Soft Bank |
| Doosan Fuel vs. Woorim Machinery Co | Doosan Fuel vs. Seohee Construction Co | Doosan Fuel vs. DB Financial Investment | Doosan Fuel vs. Golden Bridge Investment |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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