Correlation Between Samhyun Steel and Doosan Robotics

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

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

Diversification Opportunities for Samhyun Steel and Doosan Robotics

-0.13

Correlation Coefficient

Samhyun Steel  Doosan Robotics

Good diversification

The 3 months correlation between Samhyun and Doosan is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Samhyun Steel Co and Doosan Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan Robotics and Samhyun Steel 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 Samhyun Steel Co are associated (or correlated) with Doosan Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doosan Robotics has no effect on the direction of Samhyun Steel i.e., Samhyun Steel and Doosan Robotics go up and down completely randomly.

Pair Corralation between Samhyun Steel and Doosan Robotics

Assuming the 90 days trading horizon Samhyun Steel Co is expected to under-perform the Doosan Robotics. But the stock apears to be less risky and, when comparing its historical volatility, Samhyun Steel Co is 3.53 times less risky than Doosan Robotics. The stock trades about -0.02 of its potential returns per unit of risk. The Doosan Robotics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  6,620,000  in Doosan Robotics on October 25, 2024 and sell it today you would lose (10,000) from holding Doosan Robotics or give up 0.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Samhyun Steel Co  vs.  Doosan Robotics

Samhyun Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samhyun Steel Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Samhyun Steel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Doosan Robotics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Doosan Robotics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Doosan Robotics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Samhyun Steel and Doosan Robotics

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

The idea behind Samhyun Steel Co and Doosan Robotics 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.