Correlation Between Finebesteel and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Ssangyong Information 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 Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Ssangyong Information Communication, you can compare the effects of market volatilities on Finebesteel and Ssangyong Information 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 Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Ssangyong Information.
Diversification Opportunities for Finebesteel and Ssangyong Information
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Finebesteel and Ssangyong is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information 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 Ssangyong Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssangyong Information has no effect on the direction of Finebesteel i.e., Finebesteel and Ssangyong Information go up and down completely randomly.
Pair Corralation between Finebesteel and Ssangyong Information
Assuming the 90 days trading horizon Finebesteel is expected to generate 4.29 times more return on investment than Ssangyong Information. However, Finebesteel is 4.29 times more volatile than Ssangyong Information Communication. It trades about 0.23 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about 0.13 per unit of risk. If you would invest 83,800 in Finebesteel on September 2, 2024 and sell it today you would earn a total of 20,900 from holding Finebesteel or generate 24.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finebesteel vs. Ssangyong Information Communic
Performance |
| Timeline |
| Finebesteel |
| Ssangyong Information |
Finebesteel and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and Ssangyong Information
The main advantage of trading using opposite Finebesteel and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Ssangyong Information 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 Ssangyong Information will offset losses from the drop in Ssangyong Information's long position.| Finebesteel vs. Seah Steel Corp | Finebesteel vs. Korea Steel Co | Finebesteel vs. Samwon Steel | Finebesteel vs. Bookook Steel |
| Ssangyong Information vs. DONGKUK TED METAL | Ssangyong Information vs. Korean Reinsurance Co | Ssangyong Information vs. Choil Aluminum | Ssangyong Information 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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