Correlation Between Wireless Power and Doosan Pref

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

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

Diversification Opportunities for Wireless Power and Doosan Pref

0.38

Correlation Coefficient

Wireless Power  Doosan Pref

Weak diversification

The 3 months correlation between Wireless and Doosan is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wireless Power Amplifier and Doosan Pref Shs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan Pref Shs and Wireless Power 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 Wireless Power Amplifier are associated (or correlated) with Doosan Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doosan Pref Shs has no effect on the direction of Wireless Power i.e., Wireless Power and Doosan Pref go up and down completely randomly.

Pair Corralation between Wireless Power and Doosan Pref

Assuming the 90 days trading horizon Wireless Power Amplifier is expected to generate 1.56 times more return on investment than Doosan Pref. However, Wireless Power is 1.56 times more volatile than Doosan Pref Shs. It trades about 0.12 of its potential returns per unit of risk. Doosan Pref Shs is currently generating about 0.15 per unit of risk. If you would invest  255,000  in Wireless Power Amplifier on December 25, 2024 and sell it today you would earn a total of  96,000  from holding Wireless Power Amplifier or generate 37.65% return on investment over 90 days.

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

Wireless Power Amplifier  vs.  Doosan Pref Shs

Wireless Power Amplifier

Risk-Adjusted Performance

OK

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

Doosan Pref Shs

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Doosan Pref Shs are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Doosan Pref sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wireless Power and Doosan Pref

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

The idea behind Wireless Power Amplifier and Doosan Pref Shs 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.