Correlation Between INFINITT Healthcare and Finebesteel
Can any of the company-specific risk be diversified away by investing in both INFINITT Healthcare 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 INFINITT Healthcare and Finebesteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INFINITT Healthcare Co and Finebesteel, you can compare the effects of market volatilities on INFINITT Healthcare 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 INFINITT Healthcare with a short position of Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFINITT Healthcare and Finebesteel.
Diversification Opportunities for INFINITT Healthcare and Finebesteel
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INFINITT and Finebesteel is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding INFINITT Healthcare Co and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel and INFINITT Healthcare 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 INFINITT Healthcare 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 INFINITT Healthcare i.e., INFINITT Healthcare and Finebesteel go up and down completely randomly.
Pair Corralation between INFINITT Healthcare and Finebesteel
Assuming the 90 days trading horizon INFINITT Healthcare is expected to generate 8.4 times less return on investment than Finebesteel. But when comparing it to its historical volatility, INFINITT Healthcare Co is 2.77 times less risky than Finebesteel. It trades about 0.1 of its potential returns per unit of risk. Finebesteel is currently generating about 0.31 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INFINITT Healthcare Co vs. Finebesteel
Performance |
| Timeline |
| INFINITT Healthcare |
| Finebesteel |
INFINITT Healthcare and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INFINITT Healthcare and Finebesteel
The main advantage of trading using opposite INFINITT Healthcare and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFINITT Healthcare 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.| INFINITT Healthcare vs. Medy Tox | INFINITT Healthcare vs. Busan Industrial Co | INFINITT Healthcare vs. Busan Ind | INFINITT Healthcare vs. Mirae Asset Daewoo |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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