Correlation Between Doosan Bobcat and Doosan Robotics

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

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

Diversification Opportunities for Doosan Bobcat and Doosan Robotics

-0.75

Correlation Coefficient

Doosan Bobcat  Doosan Robotics

Pay attention - limited upside

The 3 months correlation between Doosan and Doosan is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Doosan Bobcat and Doosan Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan Robotics 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 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 Doosan Bobcat i.e., Doosan Bobcat and Doosan Robotics go up and down completely randomly.

Pair Corralation between Doosan Bobcat and Doosan Robotics

Assuming the 90 days trading horizon Doosan Bobcat is expected to under-perform the Doosan Robotics. But the stock apears to be less risky and, when comparing its historical volatility, Doosan Bobcat is 1.55 times less risky than Doosan Robotics. The stock trades about -0.03 of its potential returns per unit of risk. The Doosan Robotics is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  7,910,000  in Doosan Robotics on October 4, 2024 and sell it today you would lose (1,210,000) from holding Doosan Robotics or give up 15.3% of portfolio value over 90 days.

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

Doosan Bobcat  vs.  Doosan Robotics

Doosan Bobcat

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Doosan Bobcat are ranked lower than 3 (%) 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.

Doosan Robotics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doosan Robotics 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.

Pair Trading with Doosan Bobcat and Doosan Robotics

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

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.