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
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fine and APS is 0.36. 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. In addition to that, Fine Besteel is 1.1 times more volatile than APS Holdings. It trades about -0.04 of its total potential returns per unit of risk. APS Holdings is currently generating about 0.09 per unit of volatility. If you would invest 526,000 in APS Holdings on December 29, 2024 and sell it today you would earn a total of 69,000 from holding APS Holdings or generate 13.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.31% |
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. GS Engineering Construction | Fine Besteel vs. Woorim Machinery Co | Fine Besteel vs. Digital Power Communications | Fine Besteel vs. YeaRimDang Publishing 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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