Correlation Between Finebesteel and Korea Gas
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Korea Gas 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 Korea Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Korea Gas, you can compare the effects of market volatilities on Finebesteel and Korea Gas 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 Korea Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Korea Gas.
Diversification Opportunities for Finebesteel and Korea Gas
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finebesteel and Korea is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Korea Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Gas 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 Korea Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Gas has no effect on the direction of Finebesteel i.e., Finebesteel and Korea Gas go up and down completely randomly.
Pair Corralation between Finebesteel and Korea Gas
Assuming the 90 days trading horizon Finebesteel is expected to generate 0.55 times more return on investment than Korea Gas. However, Finebesteel is 1.8 times less risky than Korea Gas. It trades about -0.05 of its potential returns per unit of risk. Korea Gas is currently generating about -0.11 per unit of risk. If you would invest 107,900 in Finebesteel on September 12, 2024 and sell it today you would lose (4,900) from holding Finebesteel or give up 4.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finebesteel vs. Korea Gas
Performance |
| Timeline |
| Finebesteel |
| Korea Gas |
Finebesteel and Korea Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and Korea Gas
The main advantage of trading using opposite Finebesteel and Korea Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Korea Gas 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 Korea Gas will offset losses from the drop in Korea Gas' long position.| Finebesteel vs. Dong Il Steel | Finebesteel vs. Seah Steel Corp | Finebesteel vs. Ni Steel | Finebesteel vs. Korea Steel Co |
| Korea Gas vs. Pungguk Ethanol Industrial | Korea Gas vs. Cheryong Industrial CoLtd | Korea Gas vs. KakaoBank Corp | Korea Gas vs. MetaLabs Co |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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