Correlation Between Doosan Fuel and Daewoo SBI
Can any of the company-specific risk be diversified away by investing in both Doosan Fuel and Daewoo SBI 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 Daewoo SBI 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 Daewoo SBI SPAC, you can compare the effects of market volatilities on Doosan Fuel and Daewoo SBI 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 Daewoo SBI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doosan Fuel and Daewoo SBI.
Diversification Opportunities for Doosan Fuel and Daewoo SBI
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Doosan and Daewoo is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Doosan Fuel Cell and Daewoo SBI SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo SBI SPAC 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 Daewoo SBI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo SBI SPAC has no effect on the direction of Doosan Fuel i.e., Doosan Fuel and Daewoo SBI go up and down completely randomly.
Pair Corralation between Doosan Fuel and Daewoo SBI
Assuming the 90 days trading horizon Doosan Fuel Cell is expected to generate 2.19 times more return on investment than Daewoo SBI. However, Doosan Fuel is 2.19 times more volatile than Daewoo SBI SPAC. It trades about 0.02 of its potential returns per unit of risk. Daewoo SBI SPAC is currently generating about -0.19 per unit of risk. If you would invest 1,844,000 in Doosan Fuel Cell on September 2, 2024 and sell it today you would earn a total of 2,000 from holding Doosan Fuel Cell or generate 0.11% 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. Daewoo SBI SPAC
Performance |
| Timeline |
| Doosan Fuel Cell |
| Daewoo SBI SPAC |
Doosan Fuel and Daewoo SBI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doosan Fuel and Daewoo SBI
The main advantage of trading using opposite Doosan Fuel and Daewoo SBI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doosan Fuel position performs unexpectedly, Daewoo SBI 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 Daewoo SBI will offset losses from the drop in Daewoo SBI's long position.| Doosan Fuel vs. SK Chemicals Co | Doosan Fuel vs. ECSTELECOM Co | Doosan Fuel vs. Digital Power Communications | Doosan Fuel vs. Miwon Chemicals Co |
| Daewoo SBI vs. Woori Technology Investment | Daewoo SBI vs. DB Financial Investment | Daewoo SBI vs. Hwangkum Steel Technology | Daewoo SBI vs. Orbitech Co |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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