Correlation Between Doosan Fuel and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both Doosan Fuel and NewFlex 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 NewFlex 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 NewFlex Technology Co, you can compare the effects of market volatilities on Doosan Fuel and NewFlex 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 NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doosan Fuel and NewFlex Technology.
Diversification Opportunities for Doosan Fuel and NewFlex Technology
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Doosan and NewFlex is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Doosan Fuel Cell and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex 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 NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of Doosan Fuel i.e., Doosan Fuel and NewFlex Technology go up and down completely randomly.
Pair Corralation between Doosan Fuel and NewFlex Technology
Assuming the 90 days trading horizon Doosan Fuel Cell is expected to under-perform the NewFlex Technology. But the stock apears to be less risky and, when comparing its historical volatility, Doosan Fuel Cell is 1.42 times less risky than NewFlex Technology. The stock trades about -0.03 of its potential returns per unit of risk. The NewFlex Technology Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 667,000 in NewFlex Technology Co on August 31, 2024 and sell it today you would lose (183,000) from holding NewFlex Technology Co or give up 27.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Doosan Fuel Cell vs. NewFlex Technology Co
Performance |
| Timeline |
| Doosan Fuel Cell |
| NewFlex Technology |
Doosan Fuel and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doosan Fuel and NewFlex Technology
The main advantage of trading using opposite Doosan Fuel and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doosan Fuel position performs unexpectedly, NewFlex 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| Doosan Fuel vs. LG Display Co | Doosan Fuel vs. Samick Musical Instruments | Doosan Fuel vs. SEOJEON ELECTRIC MACHINERY | Doosan Fuel vs. Tuksu Engineering ConstructionLtd |
| NewFlex Technology vs. Dongsin Engineering Construction | NewFlex Technology vs. Doosan Fuel Cell | NewFlex Technology vs. Daishin Balance 1 | NewFlex Technology 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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