Correlation Between Doosan Fuel and Partron
Can any of the company-specific risk be diversified away by investing in both Doosan Fuel and Partron 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 Partron 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 Partron Co, you can compare the effects of market volatilities on Doosan Fuel and Partron 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 Partron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doosan Fuel and Partron.
Diversification Opportunities for Doosan Fuel and Partron
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Doosan and Partron is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Doosan Fuel Cell and Partron Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Partron 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 Partron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Partron has no effect on the direction of Doosan Fuel i.e., Doosan Fuel and Partron go up and down completely randomly.
Pair Corralation between Doosan Fuel and Partron
Assuming the 90 days trading horizon Doosan Fuel Cell is expected to generate 4.52 times more return on investment than Partron. However, Doosan Fuel is 4.52 times more volatile than Partron Co. It trades about 0.02 of its potential returns per unit of risk. Partron Co is currently generating about 0.01 per unit of risk. If you would invest 1,767,000 in Doosan Fuel Cell on September 4, 2024 and sell it today you would lose (14,000) from holding Doosan Fuel Cell or give up 0.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doosan Fuel Cell vs. Partron Co
Performance |
| Timeline |
| Doosan Fuel Cell |
| Partron |
Doosan Fuel and Partron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doosan Fuel and Partron
The main advantage of trading using opposite Doosan Fuel and Partron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doosan Fuel position performs unexpectedly, Partron 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 Partron will offset losses from the drop in Partron'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 |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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