Correlation Between Doosan Fuel and LEENO Industrial
Can any of the company-specific risk be diversified away by investing in both Doosan Fuel and LEENO Industrial 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 LEENO Industrial 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 LEENO Industrial, you can compare the effects of market volatilities on Doosan Fuel and LEENO Industrial 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 LEENO Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doosan Fuel and LEENO Industrial.
Diversification Opportunities for Doosan Fuel and LEENO Industrial
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Doosan and LEENO is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Doosan Fuel Cell and LEENO Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEENO Industrial 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 LEENO Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEENO Industrial has no effect on the direction of Doosan Fuel i.e., Doosan Fuel and LEENO Industrial go up and down completely randomly.
Pair Corralation between Doosan Fuel and LEENO Industrial
Assuming the 90 days trading horizon Doosan Fuel Cell is expected to generate 0.97 times more return on investment than LEENO Industrial. However, Doosan Fuel Cell is 1.03 times less risky than LEENO Industrial. It trades about -0.01 of its potential returns per unit of risk. LEENO Industrial is currently generating about -0.02 per unit of risk. If you would invest 2,125,000 in Doosan Fuel Cell on September 4, 2024 and sell it today you would lose (372,000) from holding Doosan Fuel Cell or give up 17.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Doosan Fuel Cell vs. LEENO Industrial
Performance |
| Timeline |
| Doosan Fuel Cell |
| LEENO Industrial |
Doosan Fuel and LEENO Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doosan Fuel and LEENO Industrial
The main advantage of trading using opposite Doosan Fuel and LEENO Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doosan Fuel position performs unexpectedly, LEENO Industrial 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 LEENO Industrial will offset losses from the drop in LEENO Industrial's long position.| Doosan Fuel vs. Dong A Steel Technology | Doosan Fuel vs. KG Eco Technology | Doosan Fuel vs. Kakao Games Corp | Doosan Fuel vs. DB Financial Investment |
| LEENO Industrial vs. Dongsin Engineering Construction | LEENO Industrial vs. Doosan Fuel Cell | LEENO Industrial vs. Daishin Balance 1 | LEENO Industrial vs. Total Soft Bank |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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