Correlation Between Kukil Metal and Doosan Fuel

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

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

Diversification Opportunities for Kukil Metal and Doosan Fuel

0.0

Correlation Coefficient

Kukil Metal  Doosan Fuel

Pay attention - limited upside

The 3 months correlation between Kukil and Doosan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal Co and Doosan Fuel Cell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan Fuel Cell and Kukil Metal 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 Kukil Metal Co are associated (or correlated) with Doosan Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doosan Fuel Cell has no effect on the direction of Kukil Metal i.e., Kukil Metal and Doosan Fuel go up and down completely randomly.

Pair Corralation between Kukil Metal and Doosan Fuel

If you would invest  168,527  in Kukil Metal Co on December 22, 2024 and sell it today you would lose (127.00) from holding Kukil Metal Co or give up 0.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.72%
Values	Daily Returns

Kukil Metal Co  vs.  Doosan Fuel Cell

Kukil Metal

Risk-Adjusted Performance

Very Weak

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

Doosan Fuel Cell

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Kukil Metal and Doosan Fuel

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

The idea behind Kukil Metal Co and Doosan Fuel Cell 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.