Correlation Between Finetechnix CoLtd and ASTORY CoLtd
Can any of the company-specific risk be diversified away by investing in both Finetechnix CoLtd and ASTORY CoLtd 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 ASTORY CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finetechnix CoLtd and ASTORY CoLtd, you can compare the effects of market volatilities on Finetechnix CoLtd and ASTORY CoLtd 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 ASTORY CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finetechnix CoLtd and ASTORY CoLtd.
Diversification Opportunities for Finetechnix CoLtd and ASTORY CoLtd
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finetechnix and ASTORY is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Finetechnix CoLtd and ASTORY CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASTORY CoLtd 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 ASTORY CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASTORY CoLtd has no effect on the direction of Finetechnix CoLtd i.e., Finetechnix CoLtd and ASTORY CoLtd go up and down completely randomly.
Pair Corralation between Finetechnix CoLtd and ASTORY CoLtd
Assuming the 90 days trading horizon Finetechnix CoLtd is expected to generate 1.04 times more return on investment than ASTORY CoLtd. However, Finetechnix CoLtd is 1.04 times more volatile than ASTORY CoLtd. It trades about -0.06 of its potential returns per unit of risk. ASTORY CoLtd is currently generating about -0.09 per unit of risk. If you would invest 234,000 in Finetechnix CoLtd on September 2, 2024 and sell it today you would lose (145,500) from holding Finetechnix CoLtd or give up 62.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finetechnix CoLtd vs. ASTORY CoLtd
Performance |
| Timeline |
| Finetechnix CoLtd |
| ASTORY CoLtd |
Finetechnix CoLtd and ASTORY CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finetechnix CoLtd and ASTORY CoLtd
The main advantage of trading using opposite Finetechnix CoLtd and ASTORY CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finetechnix CoLtd position performs unexpectedly, ASTORY CoLtd 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 ASTORY CoLtd will offset losses from the drop in ASTORY CoLtd'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 |
| ASTORY CoLtd vs. Hyundai Home Shopping | ASTORY CoLtd vs. Korean Drug Co | ASTORY CoLtd vs. Hankook Furniture Co | ASTORY CoLtd vs. Dongbang Transport Logistics |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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