Correlation Between Doosan Fuel and Kmw
Can any of the company-specific risk be diversified away by investing in both Doosan Fuel and Kmw 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 Doosan Fuel and Kmw into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Doosan Fuel Cell and Kmw Inc, you can compare the effects of market volatilities on Doosan Fuel and Kmw 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 Doosan Fuel with a short position of Kmw. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doosan Fuel and Kmw.
Diversification Opportunities for Doosan Fuel and Kmw
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Doosan and Kmw is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Doosan Fuel Cell and Kmw Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kmw Inc and Doosan Fuel 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 Doosan Fuel Cell are associated (or correlated) with Kmw. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kmw Inc has no effect on the direction of Doosan Fuel i.e., Doosan Fuel and Kmw go up and down completely randomly.
Pair Corralation between Doosan Fuel and Kmw
Assuming the 90 days trading horizon Doosan Fuel is expected to generate 1.41 times less return on investment than Kmw. In addition to that, Doosan Fuel is 1.3 times more volatile than Kmw Inc. It trades about 0.06 of its total potential returns per unit of risk. Kmw Inc is currently generating about 0.12 per unit of volatility. If you would invest 779,000 in Kmw Inc on September 3, 2024 and sell it today you would earn a total of 66,000 from holding Kmw Inc or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doosan Fuel Cell vs. Kmw Inc
Performance |
| Timeline |
| Doosan Fuel Cell |
| Kmw Inc |
Doosan Fuel and Kmw Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doosan Fuel and Kmw
The main advantage of trading using opposite Doosan Fuel and Kmw positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doosan Fuel position performs unexpectedly, Kmw 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 Kmw will offset losses from the drop in Kmw's long position.| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |