Correlation Between Doosan Fuel and Samji Electronics

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

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

Diversification Opportunities for Doosan Fuel and Samji Electronics

-0.22

Correlation Coefficient

Doosan Fuel  Samji Electronics

Very good diversification

The 3 months correlation between Doosan and Samji is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Doosan Fuel Cell and Samji Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samji Electronics and Doosan Fuel 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 Fuel Cell are associated (or correlated) with Samji Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samji Electronics has no effect on the direction of Doosan Fuel i.e., Doosan Fuel and Samji Electronics go up and down completely randomly.

Pair Corralation between Doosan Fuel and Samji Electronics

Assuming the 90 days trading horizon Doosan Fuel Cell is expected to under-perform the Samji Electronics. In addition to that, Doosan Fuel is 1.19 times more volatile than Samji Electronics Co. It trades about -0.03 of its total potential returns per unit of risk. Samji Electronics Co is currently generating about 0.22 per unit of volatility. If you would invest  796,100  in Samji Electronics Co on December 1, 2024 and sell it today you would earn a total of  209,900  from holding Samji Electronics Co or generate 26.37% return on investment over 90 days.

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

Doosan Fuel Cell  vs.  Samji Electronics Co

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.

Samji Electronics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Samji Electronics Co are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samji Electronics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Doosan Fuel and Samji Electronics

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

The idea behind Doosan Fuel Cell and Samji Electronics 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.