Correlation Between SS TECH and Finebesteel
Can any of the company-specific risk be diversified away by investing in both SS 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 SS TECH and Finebesteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and Finebesteel, you can compare the effects of market volatilities on SS 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 SS TECH with a short position of Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and Finebesteel.
Diversification Opportunities for SS TECH and Finebesteel
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between 101490 and Finebesteel is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel and SS 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 SS TECH 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 SS TECH i.e., SS TECH and Finebesteel go up and down completely randomly.
Pair Corralation between SS TECH and Finebesteel
Assuming the 90 days trading horizon SS TECH is expected to under-perform the Finebesteel. In addition to that, SS TECH is 1.09 times more volatile than Finebesteel. It trades about -0.09 of its total potential returns per unit of risk. Finebesteel is currently generating about -0.01 per unit of volatility. If you would invest 126,300 in Finebesteel on August 25, 2024 and sell it today you would lose (18,100) from holding Finebesteel or give up 14.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. Finebesteel
Performance |
| Timeline |
| SS TECH |
| Finebesteel |
SS TECH and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and Finebesteel
The main advantage of trading using opposite SS TECH and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS 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.| SS TECH vs. Korea Real Estate | SS TECH vs. Korea Ratings Co | SS TECH vs. IQuest Co | SS TECH vs. Wonbang Tech Co |
| Finebesteel vs. Dong Il Steel | Finebesteel vs. Seah Steel Corp | Finebesteel vs. Ajusteel Co | Finebesteel vs. Samwon 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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