Correlation Between Fine Besteel and APS Holdings
Can any of the company-specific risk be diversified away by investing in both Fine Besteel and APS Holdings 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 Fine Besteel and APS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fine Besteel Co and APS Holdings, you can compare the effects of market volatilities on Fine Besteel and APS Holdings 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 Fine Besteel with a short position of APS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and APS Holdings.
Diversification Opportunities for Fine Besteel and APS Holdings
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fine and APS is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel Co and APS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APS Holdings and Fine Besteel 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 Fine Besteel Co are associated (or correlated) with APS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APS Holdings has no effect on the direction of Fine Besteel i.e., Fine Besteel and APS Holdings go up and down completely randomly.
Pair Corralation between Fine Besteel and APS Holdings
Assuming the 90 days trading horizon Fine Besteel Co is expected to under-perform the APS Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Fine Besteel Co is 1.06 times less risky than APS Holdings. The stock trades about 0.0 of its potential returns per unit of risk. The APS Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 707,000 in APS Holdings on December 3, 2024 and sell it today you would lose (93,000) from holding APS Holdings or give up 13.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Fine Besteel Co vs. APS Holdings
Performance |
Timeline |
Fine Besteel |
APS Holdings |
Fine Besteel and APS Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fine Besteel and APS Holdings
The main advantage of trading using opposite Fine Besteel and APS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel position performs unexpectedly, APS Holdings 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 APS Holdings will offset losses from the drop in APS Holdings' long position.Fine Besteel vs. People Technology | Fine Besteel vs. ADTechnology CoLtd | Fine Besteel vs. Daejung Chemicals Metals | Fine Besteel vs. Adaptive Plasma Technology |
APS Holdings vs. Dongnam Chemical Co | APS Holdings vs. Miwon Chemical | APS Holdings vs. Namhae Chemical | APS Holdings vs. KPX Green Chemical |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |