Correlation Between Inzi Display and Doosan Bobcat

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

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

Diversification Opportunities for Inzi Display and Doosan Bobcat

-0.25

Correlation Coefficient

Inzi Display  Doosan Bobcat

Very good diversification

The 3 months correlation between Inzi and Doosan is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Inzi Display CoLtd and Doosan Bobcat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan Bobcat and Inzi Display 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 Inzi Display CoLtd are associated (or correlated) with Doosan Bobcat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doosan Bobcat has no effect on the direction of Inzi Display i.e., Inzi Display and Doosan Bobcat go up and down completely randomly.

Pair Corralation between Inzi Display and Doosan Bobcat

Assuming the 90 days trading horizon Inzi Display is expected to generate 1.19 times less return on investment than Doosan Bobcat. But when comparing it to its historical volatility, Inzi Display CoLtd is 1.58 times less risky than Doosan Bobcat. It trades about 0.06 of its potential returns per unit of risk. Doosan Bobcat is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  4,263,440  in Doosan Bobcat on October 6, 2024 and sell it today you would earn a total of  76,560  from holding Doosan Bobcat or generate 1.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Inzi Display CoLtd  vs.  Doosan Bobcat

Inzi Display CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inzi Display CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Doosan Bobcat

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Doosan Bobcat are ranked lower than 4 (%) 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 February 2025.

Pair Trading with Inzi Display and Doosan Bobcat

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

The idea behind Inzi Display CoLtd and Doosan Bobcat 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.