Correlation Between Leaders Technology and Fine Besteel
Can any of the company-specific risk be diversified away by investing in both Leaders Technology 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 Leaders Technology and Fine Besteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leaders Technology Investment and Fine Besteel Co, you can compare the effects of market volatilities on Leaders Technology 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 Leaders Technology with a short position of Fine Besteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leaders Technology and Fine Besteel.
Diversification Opportunities for Leaders Technology and Fine Besteel
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Leaders and Fine is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Leaders Technology Investment and Fine Besteel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fine Besteel and Leaders Technology 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 Leaders Technology Investment 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 Leaders Technology i.e., Leaders Technology and Fine Besteel go up and down completely randomly.
Pair Corralation between Leaders Technology and Fine Besteel
Assuming the 90 days trading horizon Leaders Technology Investment is expected to under-perform the Fine Besteel. In addition to that, Leaders Technology is 1.79 times more volatile than Fine Besteel Co. It trades about -0.05 of its total potential returns per unit of risk. Fine Besteel Co is currently generating about -0.03 per unit of volatility. If you would invest 213,500 in Fine Besteel Co on November 2, 2024 and sell it today you would lose (104,100) from holding Fine Besteel Co or give up 48.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.08% |
| Values | Daily Returns |
Leaders Technology Investment vs. Fine Besteel Co
Performance |
| Timeline |
| Leaders Technology |
| Fine Besteel |
Leaders Technology and Fine Besteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leaders Technology and Fine Besteel
The main advantage of trading using opposite Leaders Technology and Fine Besteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leaders Technology 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.| Leaders Technology vs. Hyundai BNG Steel | Leaders Technology vs. Korea Steel Co | Leaders Technology vs. Jeju Bank | Leaders Technology vs. Fine Besteel Co |
| Fine Besteel vs. Shinhan Financial Group | Fine Besteel vs. Aprogen Healthcare Games | Fine Besteel vs. Woori Financial Group | Fine Besteel vs. Kakao Games Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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