Correlation Between Insun Environment and Finebesteel

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

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

Diversification Opportunities for Insun Environment and Finebesteel

-0.71

Correlation Coefficient

Insun Environment  Finebesteel

Pay attention - limited upside

The 3 months correlation between Insun and Finebesteel is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Insun Environment New and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel and Insun Environment 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 Insun Environment New are associated (or correlated) with Finebesteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finebesteel has no effect on the direction of Insun Environment i.e., Insun Environment and Finebesteel go up and down completely randomly.

Pair Corralation between Insun Environment and Finebesteel

Assuming the 90 days trading horizon Insun Environment New is expected to generate 0.59 times more return on investment than Finebesteel. However, Insun Environment New is 1.7 times less risky than Finebesteel. It trades about -0.05 of its potential returns per unit of risk. Finebesteel is currently generating about -0.05 per unit of risk. If you would invest  874,000  in Insun Environment New on October 4, 2024 and sell it today you would lose (336,000) from holding Insun Environment New or give up 38.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.82%
Values	Daily Returns

Insun Environment New  vs.  Finebesteel

Insun Environment New

Risk-Adjusted Performance

0 of 100

Very Weak

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

Finebesteel

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Finebesteel are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Finebesteel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Insun Environment and Finebesteel

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

The idea behind Insun Environment New and Finebesteel 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.