Correlation Between Wonbang Tech and Finebesteel
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech 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 Wonbang Tech and Finebesteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonbang Tech Co and Finebesteel, you can compare the effects of market volatilities on Wonbang Tech 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 Wonbang Tech with a short position of Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and Finebesteel.
Diversification Opportunities for Wonbang Tech and Finebesteel
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wonbang and Finebesteel is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel and Wonbang Tech 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 Wonbang Tech 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 Wonbang Tech i.e., Wonbang Tech and Finebesteel go up and down completely randomly.
Pair Corralation between Wonbang Tech and Finebesteel
Assuming the 90 days trading horizon Wonbang Tech Co is expected to under-perform the Finebesteel. But the stock apears to be less risky and, when comparing its historical volatility, Wonbang Tech Co is 1.73 times less risky than Finebesteel. The stock trades about -0.18 of its potential returns per unit of risk. The Finebesteel is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 84,000 in Finebesteel on August 28, 2024 and sell it today you would earn a total of 29,000 from holding Finebesteel or generate 34.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonbang Tech Co vs. Finebesteel
Performance |
| Timeline |
| Wonbang Tech |
| Finebesteel |
Wonbang Tech and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and Finebesteel
The main advantage of trading using opposite Wonbang Tech and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech 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.| Wonbang Tech vs. Samsung Electronics Co | Wonbang Tech vs. Samsung Electronics Co | Wonbang Tech vs. LG Energy Solution | Wonbang Tech vs. SK Hynix |
| Finebesteel vs. ABOV Semiconductor Co | Finebesteel vs. HJ ShipBuilding Construction | Finebesteel vs. SEOJEON ELECTRIC MACHINERY | Finebesteel vs. Seoul Semiconductor Co |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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