Correlation Between Doosan Bobcat and Atinum Investment

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

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

Diversification Opportunities for Doosan Bobcat and Atinum Investment

-0.5

Correlation Coefficient

Doosan Bobcat  Atinum Investment

Very good diversification

The 3 months correlation between Doosan and Atinum is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Doosan Bobcat and Atinum Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atinum Investment 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 Atinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atinum Investment has no effect on the direction of Doosan Bobcat i.e., Doosan Bobcat and Atinum Investment go up and down completely randomly.

Pair Corralation between Doosan Bobcat and Atinum Investment

Assuming the 90 days trading horizon Doosan Bobcat is expected to generate 2.0 times more return on investment than Atinum Investment. However, Doosan Bobcat is 2.0 times more volatile than Atinum Investment Co. It trades about 0.14 of its potential returns per unit of risk. Atinum Investment Co is currently generating about -0.06 per unit of risk. If you would invest  4,190,000  in Doosan Bobcat on December 30, 2024 and sell it today you would earn a total of  920,000  from holding Doosan Bobcat or generate 21.96% return on investment over 90 days.

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

Doosan Bobcat  vs.  Atinum Investment Co

Doosan Bobcat

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Doosan Bobcat are ranked lower than 10 (%) 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.

Atinum Investment

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Doosan Bobcat and Atinum Investment

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

The idea behind Doosan Bobcat and Atinum Investment Co 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.