Correlation Between Daishin Balance and Doosan Fuel
Can any of the company-specific risk be diversified away by investing in both Daishin Balance 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 Daishin Balance and Doosan Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Balance 1 and Doosan Fuel Cell, you can compare the effects of market volatilities on Daishin Balance 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 Daishin Balance with a short position of Doosan Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and Doosan Fuel.
Diversification Opportunities for Daishin Balance and Doosan Fuel
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daishin and Doosan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance 1 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 Daishin Balance 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 Daishin Balance 1 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 Daishin Balance i.e., Daishin Balance and Doosan Fuel go up and down completely randomly.
Pair Corralation between Daishin Balance and Doosan Fuel
Assuming the 90 days trading horizon Daishin Balance 1 is expected to under-perform the Doosan Fuel. But the stock apears to be less risky and, when comparing its historical volatility, Daishin Balance 1 is 1.57 times less risky than Doosan Fuel. The stock trades about -0.05 of its potential returns per unit of risk. The Doosan Fuel Cell is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,898,000 in Doosan Fuel Cell on August 31, 2024 and sell it today you would lose (30,000) from holding Doosan Fuel Cell or give up 1.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Balance 1 vs. Doosan Fuel Cell
Performance |
| Timeline |
| Daishin Balance 1 |
| Doosan Fuel Cell |
Daishin Balance and Doosan Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Balance and Doosan Fuel
The main advantage of trading using opposite Daishin Balance and Doosan Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Balance 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.| Daishin Balance vs. Namhae Chemical | Daishin Balance vs. Youl Chon Chemical | Daishin Balance vs. Miwon Chemical | Daishin Balance vs. Nable Communications |
| Doosan Fuel vs. LG Display Co | Doosan Fuel vs. Samick Musical Instruments | Doosan Fuel vs. SEOJEON ELECTRIC MACHINERY | Doosan Fuel vs. Tuksu Engineering ConstructionLtd |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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