Correlation Between Alton Sports and Doosan
Can any of the company-specific risk be diversified away by investing in both Alton Sports 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 Alton Sports and Doosan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and Doosan, you can compare the effects of market volatilities on Alton Sports 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 Alton Sports with a short position of Doosan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and Doosan.
Diversification Opportunities for Alton Sports and Doosan
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alton and Doosan is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and Doosan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan and Alton Sports 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 Alton Sports CoLtd 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 Alton Sports i.e., Alton Sports and Doosan go up and down completely randomly.
Pair Corralation between Alton Sports and Doosan
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to under-perform the Doosan. But the stock apears to be less risky and, when comparing its historical volatility, Alton Sports CoLtd is 1.6 times less risky than Doosan. The stock trades about -0.09 of its potential returns per unit of risk. The Doosan is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,380,159 in Doosan on September 12, 2024 and sell it today you would earn a total of 13,619,841 from holding Doosan or generate 162.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Alton Sports CoLtd vs. Doosan
Performance |
| Timeline |
| Alton Sports CoLtd |
| Doosan |
Alton Sports and Doosan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and Doosan
The main advantage of trading using opposite Alton Sports and Doosan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports 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.| Alton Sports vs. Daou Data Corp | Alton Sports vs. Solution Advanced Technology | Alton Sports vs. Busan Industrial Co | Alton Sports vs. Busan Ind |
| Doosan vs. Sejong Telecom | Doosan vs. BooKook Steel Co | Doosan vs. Han Kook Steel | Doosan vs. Kisan Telecom Co |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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