Correlation Between Fine Besteel and Wonik Ips

Can any of the company-specific risk be diversified away by investing in both Fine Besteel and Wonik Ips 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 Wonik Ips 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 Wonik Ips Co, you can compare the effects of market volatilities on Fine Besteel and Wonik Ips 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 Wonik Ips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and Wonik Ips.

Diversification Opportunities for Fine Besteel and Wonik Ips

-0.71

Correlation Coefficient

Fine Besteel  Wonik Ips

Pay attention - limited upside

The 3 months correlation between Fine and Wonik is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel Co and Wonik Ips Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonik Ips 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 Wonik Ips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonik Ips has no effect on the direction of Fine Besteel i.e., Fine Besteel and Wonik Ips go up and down completely randomly.

Pair Corralation between Fine Besteel and Wonik Ips

Assuming the 90 days trading horizon Fine Besteel Co is expected to under-perform the Wonik Ips. In addition to that, Fine Besteel is 1.0 times more volatile than Wonik Ips Co. It trades about -0.04 of its total potential returns per unit of risk. Wonik Ips Co is currently generating about -0.01 per unit of volatility. If you would invest  2,902,849  in Wonik Ips Co on October 5, 2024 and sell it today you would lose (692,849) from holding Wonik Ips Co or give up 23.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Fine Besteel Co  vs.  Wonik Ips Co

Fine Besteel

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fine Besteel Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Wonik Ips

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wonik Ips Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Fine Besteel and Wonik Ips

The main advantage of trading using opposite Fine Besteel and Wonik Ips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel position performs unexpectedly, Wonik Ips 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 Wonik Ips will offset losses from the drop in Wonik Ips' long position.

The idea behind Fine Besteel Co and Wonik Ips 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.