Correlation Between Doosan Fuel and NHN KCP
Can any of the company-specific risk be diversified away by investing in both Doosan Fuel and NHN KCP 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 NHN KCP 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 NHN KCP Corp, you can compare the effects of market volatilities on Doosan Fuel and NHN KCP 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 NHN KCP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doosan Fuel and NHN KCP.
Diversification Opportunities for Doosan Fuel and NHN KCP
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Doosan and NHN is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Doosan Fuel Cell and NHN KCP Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NHN KCP Corp 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 NHN KCP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NHN KCP Corp has no effect on the direction of Doosan Fuel i.e., Doosan Fuel and NHN KCP go up and down completely randomly.
Pair Corralation between Doosan Fuel and NHN KCP
Assuming the 90 days trading horizon Doosan Fuel Cell is expected to generate 1.1 times more return on investment than NHN KCP. However, Doosan Fuel is 1.1 times more volatile than NHN KCP Corp. It trades about -0.01 of its potential returns per unit of risk. NHN KCP Corp is currently generating about -0.05 per unit of risk. If you would invest 2,150,000 in Doosan Fuel Cell on September 3, 2024 and sell it today you would lose (397,000) from holding Doosan Fuel Cell or give up 18.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doosan Fuel Cell vs. NHN KCP Corp
Performance |
| Timeline |
| Doosan Fuel Cell |
| NHN KCP Corp |
Doosan Fuel and NHN KCP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doosan Fuel and NHN KCP
The main advantage of trading using opposite Doosan Fuel and NHN KCP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doosan Fuel position performs unexpectedly, NHN KCP 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 NHN KCP will offset losses from the drop in NHN KCP'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 |
| NHN KCP vs. Dongsin Engineering Construction | NHN KCP vs. Doosan Fuel Cell | NHN KCP vs. Daishin Balance 1 | NHN KCP 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Transaction History View history of all your transactions and understand their impact on performance |