Correlation Between Finebesteel and Sam Yang
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Sam Yang 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 Sam Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Sam Yang Foods, you can compare the effects of market volatilities on Finebesteel and Sam Yang 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 Sam Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Sam Yang.
Diversification Opportunities for Finebesteel and Sam Yang
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Finebesteel and Sam is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Sam Yang Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam Yang Foods 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 Sam Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam Yang Foods has no effect on the direction of Finebesteel i.e., Finebesteel and Sam Yang go up and down completely randomly.
Pair Corralation between Finebesteel and Sam Yang
Assuming the 90 days trading horizon Finebesteel is expected to generate 1.43 times more return on investment than Sam Yang. However, Finebesteel is 1.43 times more volatile than Sam Yang Foods. It trades about 0.35 of its potential returns per unit of risk. Sam Yang Foods is currently generating about -0.19 per unit of risk. If you would invest 91,600 in Finebesteel on October 29, 2024 and sell it today you would earn a total of 17,800 from holding Finebesteel or generate 19.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finebesteel vs. Sam Yang Foods
Performance |
| Timeline |
| Finebesteel |
| Sam Yang Foods |
Finebesteel and Sam Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and Sam Yang
The main advantage of trading using opposite Finebesteel and Sam Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Sam Yang 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 Sam Yang will offset losses from the drop in Sam Yang's long position.| Finebesteel vs. Ssangyong Materials Corp | Finebesteel vs. Dong A Steel Technology | Finebesteel vs. Cuckoo Homesys Co | Finebesteel vs. Daejoo Electronic Materials |
| Sam Yang vs. Taegu Broadcasting | Sam Yang vs. Korea Information Engineering | Sam Yang vs. DataSolution | Sam Yang vs. Daou Data Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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