Correlation Between Finebesteel and Hankukpackage
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Hankukpackage 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 Finebesteel and Hankukpackage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Hankukpackage Co, you can compare the effects of market volatilities on Finebesteel and Hankukpackage 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 Finebesteel with a short position of Hankukpackage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Hankukpackage.
Diversification Opportunities for Finebesteel and Hankukpackage
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finebesteel and Hankukpackage is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Hankukpackage Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankukpackage and Finebesteel 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 Finebesteel are associated (or correlated) with Hankukpackage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankukpackage has no effect on the direction of Finebesteel i.e., Finebesteel and Hankukpackage go up and down completely randomly.
Pair Corralation between Finebesteel and Hankukpackage
Assuming the 90 days trading horizon Finebesteel is expected to generate 2.94 times more return on investment than Hankukpackage. However, Finebesteel is 2.94 times more volatile than Hankukpackage Co. It trades about 0.13 of its potential returns per unit of risk. Hankukpackage Co is currently generating about -0.08 per unit of risk. If you would invest 83,600 in Finebesteel on September 6, 2024 and sell it today you would earn a total of 21,900 from holding Finebesteel or generate 26.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Finebesteel vs. Hankukpackage Co
Performance |
Timeline |
Finebesteel |
Hankukpackage |
Finebesteel and Hankukpackage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Finebesteel and Hankukpackage
The main advantage of trading using opposite Finebesteel and Hankukpackage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Hankukpackage 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 Hankukpackage will offset losses from the drop in Hankukpackage's long position.Finebesteel vs. Dong Il Steel | Finebesteel vs. Seah Steel Corp | Finebesteel vs. Ajusteel Co | Finebesteel vs. Ni Steel |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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