Correlation Between GemVaxKAEL CoLtd and Fine Besteel

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

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

Diversification Opportunities for GemVaxKAEL CoLtd and Fine Besteel

-0.18

Correlation Coefficient

GemVaxKAEL CoLtd  Fine Besteel

Good diversification

The 3 months correlation between GemVaxKAEL and Fine is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd and Fine Besteel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fine Besteel and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd are associated (or correlated) with Fine Besteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fine Besteel has no effect on the direction of GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and Fine Besteel go up and down completely randomly.

Pair Corralation between GemVaxKAEL CoLtd and Fine Besteel

Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to generate 2.02 times more return on investment than Fine Besteel. However, GemVaxKAEL CoLtd is 2.02 times more volatile than Fine Besteel Co. It trades about -0.04 of its potential returns per unit of risk. Fine Besteel Co is currently generating about -0.25 per unit of risk. If you would invest  1,563,000  in GemVaxKAEL CoLtd on October 9, 2024 and sell it today you would lose (64,000) from holding GemVaxKAEL CoLtd or give up 4.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

GemVaxKAEL CoLtd  vs.  Fine Besteel Co

GemVaxKAEL CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GemVaxKAEL CoLtd 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.

Fine Besteel

Risk-Adjusted Performance

2 of 100

Weak

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

Pair Trading with GemVaxKAEL CoLtd and Fine Besteel

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

The idea behind GemVaxKAEL CoLtd and Fine Besteel 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.