Correlation Between Finebesteel and Samhwa Paint
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Samhwa Paint 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 Finebesteel and Samhwa Paint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Samhwa Paint Industrial, you can compare the effects of market volatilities on Finebesteel and Samhwa Paint 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 Finebesteel with a short position of Samhwa Paint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Samhwa Paint.
Diversification Opportunities for Finebesteel and Samhwa Paint
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finebesteel and Samhwa is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Samhwa Paint Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhwa Paint Industrial and Finebesteel 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 Finebesteel are associated (or correlated) with Samhwa Paint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhwa Paint Industrial has no effect on the direction of Finebesteel i.e., Finebesteel and Samhwa Paint go up and down completely randomly.
Pair Corralation between Finebesteel and Samhwa Paint
Assuming the 90 days trading horizon Finebesteel is expected to under-perform the Samhwa Paint. But the stock apears to be less risky and, when comparing its historical volatility, Finebesteel is 1.05 times less risky than Samhwa Paint. The stock trades about -0.04 of its potential returns per unit of risk. The Samhwa Paint Industrial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 574,743 in Samhwa Paint Industrial on August 31, 2024 and sell it today you would earn a total of 77,257 from holding Samhwa Paint Industrial or generate 13.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finebesteel vs. Samhwa Paint Industrial
Performance |
| Timeline |
| Finebesteel |
| Samhwa Paint Industrial |
Finebesteel and Samhwa Paint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and Samhwa Paint
The main advantage of trading using opposite Finebesteel and Samhwa Paint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Samhwa Paint 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 Samhwa Paint will offset losses from the drop in Samhwa Paint's long position.| Finebesteel vs. Dong Il Steel | Finebesteel vs. Seah Steel Corp | Finebesteel vs. Ajusteel Co | Finebesteel vs. Ni Steel |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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