Correlation Between Doosan Fuel and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Doosan Fuel and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Doosan Fuel and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doosan Fuel and Dow Jones.
Diversification Opportunities for Doosan Fuel and Dow Jones
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Doosan and Dow is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Doosan Fuel Cell and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Doosan Fuel i.e., Doosan Fuel and Dow Jones go up and down completely randomly.
Pair Corralation between Doosan Fuel and Dow Jones
Assuming the 90 days trading horizon Doosan Fuel Cell is expected to under-perform the Dow Jones. In addition to that, Doosan Fuel is 3.42 times more volatile than Dow Jones Industrial. It trades about -0.04 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of volatility. If you would invest 4,083,497 in Dow Jones Industrial on June 21, 2024 and sell it today you would earn a total of 66,813 from holding Dow Jones Industrial or generate 1.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.24% |
Values | Daily Returns |
Doosan Fuel Cell vs. Dow Jones Industrial
Performance |
Timeline |
Doosan Fuel and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Doosan Fuel Cell
Pair trading matchups for Doosan Fuel
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Doosan Fuel and Dow Jones
The main advantage of trading using opposite Doosan Fuel and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doosan Fuel position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.Doosan Fuel vs. LS Electric | Doosan Fuel vs. Huons Global Co | Doosan Fuel vs. Busan Industrial Co | Doosan Fuel vs. Busan Ind |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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