Correlation Between Doosan Fuel and IM CoLtd
Can any of the company-specific risk be diversified away by investing in both Doosan Fuel and IM CoLtd 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 IM CoLtd 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 IM CoLtd, you can compare the effects of market volatilities on Doosan Fuel and IM CoLtd 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 IM CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doosan Fuel and IM CoLtd.
Diversification Opportunities for Doosan Fuel and IM CoLtd
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Doosan and 101390 is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Doosan Fuel Cell and IM CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IM CoLtd 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 IM CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IM CoLtd has no effect on the direction of Doosan Fuel i.e., Doosan Fuel and IM CoLtd go up and down completely randomly.
Pair Corralation between Doosan Fuel and IM CoLtd
Assuming the 90 days trading horizon Doosan Fuel Cell is expected to generate 1.49 times more return on investment than IM CoLtd. However, Doosan Fuel is 1.49 times more volatile than IM CoLtd. It trades about 0.07 of its potential returns per unit of risk. IM CoLtd is currently generating about -0.28 per unit of risk. If you would invest 1,745,000 in Doosan Fuel Cell on September 1, 2024 and sell it today you would earn a total of 101,000 from holding Doosan Fuel Cell or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doosan Fuel Cell vs. IM CoLtd
Performance |
| Timeline |
| Doosan Fuel Cell |
| IM CoLtd |
Doosan Fuel and IM CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doosan Fuel and IM CoLtd
The main advantage of trading using opposite Doosan Fuel and IM CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doosan Fuel position performs unexpectedly, IM CoLtd 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 IM CoLtd will offset losses from the drop in IM CoLtd's long position.| Doosan Fuel vs. LS Electric | Doosan Fuel vs. KB Financial Group | Doosan Fuel vs. Dongbang Ship Machinery |
| IM CoLtd vs. Dongsin Engineering Construction | IM CoLtd vs. Doosan Fuel Cell | IM CoLtd vs. Daishin Balance 1 | IM CoLtd 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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