Correlation Between Doosan Bobcat and Samhyun

Can any of the company-specific risk be diversified away by investing in both Doosan Bobcat and Samhyun 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 Bobcat and Samhyun into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Doosan Bobcat and Samhyun, you can compare the effects of market volatilities on Doosan Bobcat and Samhyun 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 Bobcat with a short position of Samhyun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doosan Bobcat and Samhyun.

Diversification Opportunities for Doosan Bobcat and Samhyun

-0.35

Correlation Coefficient

Doosan Bobcat  Samhyun

Very good diversification

The 3 months correlation between Doosan and Samhyun is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Doosan Bobcat and Samhyun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhyun and Doosan Bobcat 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 Bobcat are associated (or correlated) with Samhyun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhyun has no effect on the direction of Doosan Bobcat i.e., Doosan Bobcat and Samhyun go up and down completely randomly.

Pair Corralation between Doosan Bobcat and Samhyun

Assuming the 90 days trading horizon Doosan Bobcat is expected to generate 0.4 times more return on investment than Samhyun. However, Doosan Bobcat is 2.49 times less risky than Samhyun. It trades about 0.07 of its potential returns per unit of risk. Samhyun is currently generating about -0.02 per unit of risk. If you would invest  4,220,000  in Doosan Bobcat on September 26, 2024 and sell it today you would earn a total of  415,000  from holding Doosan Bobcat or generate 9.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Doosan Bobcat  vs.  Samhyun

Doosan Bobcat

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Doosan Bobcat are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Doosan Bobcat may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Samhyun

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samhyun has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Doosan Bobcat and Samhyun

The main advantage of trading using opposite Doosan Bobcat and Samhyun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doosan Bobcat position performs unexpectedly, Samhyun 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 Samhyun will offset losses from the drop in Samhyun's long position.

The idea behind Doosan Bobcat and Samhyun pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.