Correlation Between Moonbae Steel and Fine Besteel
Can any of the company-specific risk be diversified away by investing in both Moonbae Steel and Fine Besteel 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 Moonbae Steel and Fine Besteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moonbae Steel and Fine Besteel Co, you can compare the effects of market volatilities on Moonbae Steel and Fine Besteel 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 Moonbae Steel with a short position of Fine Besteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moonbae Steel and Fine Besteel.
Diversification Opportunities for Moonbae Steel and Fine Besteel
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Moonbae and Fine is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Moonbae Steel and Fine Besteel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fine Besteel and Moonbae Steel 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 Moonbae Steel are associated (or correlated) with Fine Besteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fine Besteel has no effect on the direction of Moonbae Steel i.e., Moonbae Steel and Fine Besteel go up and down completely randomly.
Pair Corralation between Moonbae Steel and Fine Besteel
Assuming the 90 days trading horizon Moonbae Steel is expected to generate 0.65 times more return on investment than Fine Besteel. However, Moonbae Steel is 1.54 times less risky than Fine Besteel. It trades about -0.05 of its potential returns per unit of risk. Fine Besteel Co is currently generating about -0.03 per unit of risk. If you would invest 367,495 in Moonbae Steel on November 9, 2024 and sell it today you would lose (142,995) from holding Moonbae Steel or give up 38.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moonbae Steel vs. Fine Besteel Co
Performance |
| Timeline |
| Moonbae Steel |
| Fine Besteel |
Moonbae Steel and Fine Besteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moonbae Steel and Fine Besteel
The main advantage of trading using opposite Moonbae Steel and Fine Besteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moonbae Steel position performs unexpectedly, Fine Besteel 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 Fine Besteel will offset losses from the drop in Fine Besteel's long position.| Moonbae Steel vs. INNOX Advanced Materials | Moonbae Steel vs. RF Materials Co | Moonbae Steel vs. Hyundai Engineering Plastics | Moonbae Steel vs. Samsung Publishing Co |
| Fine Besteel vs. Vina Technology Co | Fine Besteel vs. Digital Imaging Technology | Fine Besteel vs. HB Technology TD | Fine Besteel vs. Hannong 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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