Correlation Between Finebesteel and Cytogen
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Cytogen 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 Cytogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Cytogen, you can compare the effects of market volatilities on Finebesteel and Cytogen 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 Cytogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Cytogen.
Diversification Opportunities for Finebesteel and Cytogen
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finebesteel and Cytogen is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Cytogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytogen 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 Cytogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytogen has no effect on the direction of Finebesteel i.e., Finebesteel and Cytogen go up and down completely randomly.
Pair Corralation between Finebesteel and Cytogen
Assuming the 90 days trading horizon Finebesteel is expected to generate 0.55 times more return on investment than Cytogen. However, Finebesteel is 1.82 times less risky than Cytogen. It trades about 0.14 of its potential returns per unit of risk. Cytogen is currently generating about -0.08 per unit of risk. If you would invest 83,800 in Finebesteel on October 25, 2024 and sell it today you would earn a total of 26,200 from holding Finebesteel or generate 31.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.39% |
Values | Daily Returns |
Finebesteel vs. Cytogen
Performance |
Timeline |
Finebesteel |
Cytogen |
Finebesteel and Cytogen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Finebesteel and Cytogen
The main advantage of trading using opposite Finebesteel and Cytogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Cytogen 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 Cytogen will offset losses from the drop in Cytogen's long position.Finebesteel vs. Seah Steel Corp | Finebesteel vs. Ajusteel Co | Finebesteel vs. Ni Steel | Finebesteel vs. Korea Steel Co |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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