Correlation Between Finetechnix CoLtd and SOOSAN INT
Can any of the company-specific risk be diversified away by investing in both Finetechnix CoLtd and SOOSAN INT 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 Finetechnix CoLtd and SOOSAN INT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finetechnix CoLtd and SOOSAN INT Co, you can compare the effects of market volatilities on Finetechnix CoLtd and SOOSAN INT 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 Finetechnix CoLtd with a short position of SOOSAN INT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finetechnix CoLtd and SOOSAN INT.
Diversification Opportunities for Finetechnix CoLtd and SOOSAN INT
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Finetechnix and SOOSAN is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Finetechnix CoLtd and SOOSAN INT Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOOSAN INT and Finetechnix CoLtd 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 Finetechnix CoLtd are associated (or correlated) with SOOSAN INT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOOSAN INT has no effect on the direction of Finetechnix CoLtd i.e., Finetechnix CoLtd and SOOSAN INT go up and down completely randomly.
Pair Corralation between Finetechnix CoLtd and SOOSAN INT
Assuming the 90 days trading horizon Finetechnix CoLtd is expected to under-perform the SOOSAN INT. In addition to that, Finetechnix CoLtd is 1.04 times more volatile than SOOSAN INT Co. It trades about -0.06 of its total potential returns per unit of risk. SOOSAN INT Co is currently generating about -0.01 per unit of volatility. If you would invest 1,127,871 in SOOSAN INT Co on September 2, 2024 and sell it today you would lose (276,871) from holding SOOSAN INT Co or give up 24.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finetechnix CoLtd vs. SOOSAN INT Co
Performance |
| Timeline |
| Finetechnix CoLtd |
| SOOSAN INT |
Finetechnix CoLtd and SOOSAN INT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finetechnix CoLtd and SOOSAN INT
The main advantage of trading using opposite Finetechnix CoLtd and SOOSAN INT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finetechnix CoLtd position performs unexpectedly, SOOSAN INT 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 SOOSAN INT will offset losses from the drop in SOOSAN INT's long position.| Finetechnix CoLtd vs. Dongsin Engineering Construction | Finetechnix CoLtd vs. Doosan Fuel Cell | Finetechnix CoLtd vs. Daishin Balance 1 | Finetechnix CoLtd vs. Total Soft Bank |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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