Correlation Between Doosan Fuel and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Doosan Fuel and Woori Technology 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 Woori Technology 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 Woori Technology, you can compare the effects of market volatilities on Doosan Fuel and Woori Technology 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 Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doosan Fuel and Woori Technology.
Diversification Opportunities for Doosan Fuel and Woori Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Doosan and Woori is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Doosan Fuel Cell and Woori Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology 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 Woori Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Technology has no effect on the direction of Doosan Fuel i.e., Doosan Fuel and Woori Technology go up and down completely randomly.
Pair Corralation between Doosan Fuel and Woori Technology
Assuming the 90 days trading horizon Doosan Fuel Cell is expected to generate 1.73 times more return on investment than Woori Technology. However, Doosan Fuel is 1.73 times more volatile than Woori Technology. It trades about 0.06 of its potential returns per unit of risk. Woori Technology is currently generating about 0.04 per unit of risk. 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 | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doosan Fuel Cell vs. Woori Technology
Performance |
| Timeline |
| Doosan Fuel Cell |
| Woori Technology |
Doosan Fuel and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doosan Fuel and Woori Technology
The main advantage of trading using opposite Doosan Fuel and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doosan Fuel position performs unexpectedly, Woori Technology 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 Woori Technology will offset losses from the drop in Woori Technology'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 |
| Woori Technology vs. GS Retail Co | Woori Technology vs. Neungyule Education | Woori Technology vs. KMH Hitech Co | Woori Technology vs. Sungchang Autotech 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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