Correlation Between Kukdo Chemical and Finebesteel
Can any of the company-specific risk be diversified away by investing in both Kukdo Chemical 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 Kukdo Chemical and Finebesteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukdo Chemical Co and Finebesteel, you can compare the effects of market volatilities on Kukdo Chemical 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 Kukdo Chemical with a short position of Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdo Chemical and Finebesteel.
Diversification Opportunities for Kukdo Chemical and Finebesteel
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kukdo and Finebesteel is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kukdo Chemical Co and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel and Kukdo Chemical 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 Kukdo Chemical Co 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 Kukdo Chemical i.e., Kukdo Chemical and Finebesteel go up and down completely randomly.
Pair Corralation between Kukdo Chemical and Finebesteel
Assuming the 90 days trading horizon Kukdo Chemical Co is expected to under-perform the Finebesteel. But the stock apears to be less risky and, when comparing its historical volatility, Kukdo Chemical Co is 1.89 times less risky than Finebesteel. The stock trades about -0.12 of its potential returns per unit of risk. The Finebesteel is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 89,700 in Finebesteel on September 3, 2024 and sell it today you would earn a total of 15,000 from holding Finebesteel or generate 16.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdo Chemical Co vs. Finebesteel
Performance |
| Timeline |
| Kukdo Chemical |
| Finebesteel |
Kukdo Chemical and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdo Chemical and Finebesteel
The main advantage of trading using opposite Kukdo Chemical and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdo Chemical 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.| Kukdo Chemical vs. AptaBio Therapeutics | Kukdo Chemical vs. Daewoo SBI SPAC | Kukdo Chemical vs. Dream Security co | Kukdo Chemical vs. Microfriend |
| Finebesteel vs. Seah Steel Corp | Finebesteel vs. Ni Steel | Finebesteel vs. Korea Steel Co | Finebesteel vs. Bookook Steel |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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