Correlation Between Doosan Fuel and Jeju Semiconductor
Can any of the company-specific risk be diversified away by investing in both Doosan Fuel and Jeju Semiconductor 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 Jeju Semiconductor 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 Jeju Semiconductor Corp, you can compare the effects of market volatilities on Doosan Fuel and Jeju Semiconductor 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 Jeju Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doosan Fuel and Jeju Semiconductor.
Diversification Opportunities for Doosan Fuel and Jeju Semiconductor
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Doosan and Jeju is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Doosan Fuel Cell and Jeju Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Semiconductor 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 Jeju Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Semiconductor Corp has no effect on the direction of Doosan Fuel i.e., Doosan Fuel and Jeju Semiconductor go up and down completely randomly.
Pair Corralation between Doosan Fuel and Jeju Semiconductor
Assuming the 90 days trading horizon Doosan Fuel Cell is expected to under-perform the Jeju Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Doosan Fuel Cell is 1.54 times less risky than Jeju Semiconductor. The stock trades about -0.03 of its potential returns per unit of risk. The Jeju Semiconductor Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 375,000 in Jeju Semiconductor Corp on September 3, 2024 and sell it today you would earn a total of 504,000 from holding Jeju Semiconductor Corp or generate 134.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doosan Fuel Cell vs. Jeju Semiconductor Corp
Performance |
| Timeline |
| Doosan Fuel Cell |
| Jeju Semiconductor Corp |
Doosan Fuel and Jeju Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doosan Fuel and Jeju Semiconductor
The main advantage of trading using opposite Doosan Fuel and Jeju Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doosan Fuel position performs unexpectedly, Jeju Semiconductor 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 Jeju Semiconductor will offset losses from the drop in Jeju Semiconductor'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 |
| Jeju Semiconductor vs. Dongsin Engineering Construction | Jeju Semiconductor vs. Doosan Fuel Cell | Jeju Semiconductor vs. Daishin Balance 1 | Jeju Semiconductor 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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