Correlation Between Sangsin Energy and Doosan Bobcat

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

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

Diversification Opportunities for Sangsin Energy and Doosan Bobcat

-0.44

Correlation Coefficient

Sangsin Energy  Doosan Bobcat

Very good diversification

The 3 months correlation between Sangsin and Doosan is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display and Doosan Bobcat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan Bobcat and Sangsin Energy 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 Sangsin Energy Display 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 Sangsin Energy i.e., Sangsin Energy and Doosan Bobcat go up and down completely randomly.

Pair Corralation between Sangsin Energy and Doosan Bobcat

Assuming the 90 days trading horizon Sangsin Energy Display is expected to under-perform the Doosan Bobcat. In addition to that, Sangsin Energy is 1.2 times more volatile than Doosan Bobcat. It trades about -0.12 of its total potential returns per unit of risk. Doosan Bobcat is currently generating about 0.12 per unit of volatility. If you would invest  3,845,937  in Doosan Bobcat on October 24, 2024 and sell it today you would earn a total of  704,063  from holding Doosan Bobcat or generate 18.31% return on investment over 90 days.

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

Sangsin Energy Display  vs.  Doosan Bobcat

Sangsin Energy Display

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sangsin Energy Display 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

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Doosan Bobcat are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Doosan Bobcat sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sangsin Energy and Doosan Bobcat

The main advantage of trading using opposite Sangsin Energy and Doosan Bobcat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsin Energy 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 Sangsin Energy Display 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.