Correlation Between Taeyang Metal and Finebesteel
Can any of the company-specific risk be diversified away by investing in both Taeyang Metal and Finebesteel 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 Taeyang Metal and Finebesteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taeyang Metal Industrial and Finebesteel, you can compare the effects of market volatilities on Taeyang Metal and Finebesteel 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 Taeyang Metal with a short position of Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taeyang Metal and Finebesteel.
Diversification Opportunities for Taeyang Metal and Finebesteel
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taeyang and Finebesteel is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Taeyang Metal Industrial and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel and Taeyang Metal 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 Taeyang Metal Industrial are associated (or correlated) with Finebesteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finebesteel has no effect on the direction of Taeyang Metal i.e., Taeyang Metal and Finebesteel go up and down completely randomly.
Pair Corralation between Taeyang Metal and Finebesteel
Assuming the 90 days trading horizon Taeyang Metal Industrial is expected to under-perform the Finebesteel. But the stock apears to be less risky and, when comparing its historical volatility, Taeyang Metal Industrial is 1.54 times less risky than Finebesteel. The stock trades about -0.35 of its potential returns per unit of risk. The Finebesteel is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 86,000 in Finebesteel on September 1, 2024 and sell it today you would earn a total of 18,700 from holding Finebesteel or generate 21.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taeyang Metal Industrial vs. Finebesteel
Performance |
| Timeline |
| Taeyang Metal Industrial |
| Finebesteel |
Taeyang Metal and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taeyang Metal and Finebesteel
The main advantage of trading using opposite Taeyang Metal and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taeyang Metal position performs unexpectedly, Finebesteel 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 Finebesteel will offset losses from the drop in Finebesteel's long position.| Taeyang Metal vs. AptaBio Therapeutics | Taeyang Metal vs. Daewoo SBI SPAC | Taeyang Metal vs. Dream Security co | Taeyang Metal vs. Microfriend |
| Finebesteel vs. Samyang Foods Co | Finebesteel vs. Visang Education | Finebesteel vs. Sung Bo Chemicals | Finebesteel vs. Kukdong Oil Chemicals |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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