Correlation Between SEOWONINTECHCoLtd and Fine Besteel

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

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

Diversification Opportunities for SEOWONINTECHCoLtd and Fine Besteel

-0.31

Correlation Coefficient

SEOWONINTECHCoLtd  Fine Besteel

Very good diversification

The 3 months correlation between SEOWONINTECHCoLtd and Fine is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SEOWONINTECHCoLtd and Fine Besteel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fine Besteel and SEOWONINTECHCoLtd 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 SEOWONINTECHCoLtd 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 SEOWONINTECHCoLtd i.e., SEOWONINTECHCoLtd and Fine Besteel go up and down completely randomly.

Pair Corralation between SEOWONINTECHCoLtd and Fine Besteel

Assuming the 90 days trading horizon SEOWONINTECHCoLtd is expected to under-perform the Fine Besteel. But the stock apears to be less risky and, when comparing its historical volatility, SEOWONINTECHCoLtd is 5.36 times less risky than Fine Besteel. The stock trades about -0.15 of its potential returns per unit of risk. The Fine Besteel Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  92,300  in Fine Besteel Co on December 27, 2024 and sell it today you would lose (7,100) from holding Fine Besteel Co or give up 7.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.28%
Values	Daily Returns

SEOWONINTECHCoLtd  vs.  Fine Besteel Co

SEOWONINTECHCoLtd

Risk-Adjusted Performance

Very Weak

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

Fine Besteel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fine Besteel Co has generated negative risk-adjusted returns adding no value to investors with long positions. 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 SEOWONINTECHCoLtd and Fine Besteel

The main advantage of trading using opposite SEOWONINTECHCoLtd and Fine Besteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEOWONINTECHCoLtd 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 SEOWONINTECHCoLtd 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.