Correlation Between Finebesteel and ICD
Can any of the company-specific risk be diversified away by investing in both Finebesteel and ICD 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 ICD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and ICD Co, you can compare the effects of market volatilities on Finebesteel and ICD 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 ICD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and ICD.
Diversification Opportunities for Finebesteel and ICD
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finebesteel and ICD is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and ICD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICD Co 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 ICD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICD Co has no effect on the direction of Finebesteel i.e., Finebesteel and ICD go up and down completely randomly.
Pair Corralation between Finebesteel and ICD
Assuming the 90 days trading horizon Finebesteel is expected to generate 1.0 times more return on investment than ICD. However, Finebesteel is 1.0 times more volatile than ICD Co. It trades about -0.07 of its potential returns per unit of risk. ICD Co is currently generating about -0.08 per unit of risk. If you would invest 243,000 in Finebesteel on August 27, 2024 and sell it today you would lose (134,800) from holding Finebesteel or give up 55.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finebesteel vs. ICD Co
Performance |
| Timeline |
| Finebesteel |
| ICD Co |
Finebesteel and ICD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and ICD
The main advantage of trading using opposite Finebesteel and ICD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, ICD 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 ICD will offset losses from the drop in ICD's long position.| Finebesteel vs. ABOV Semiconductor Co | Finebesteel vs. HJ ShipBuilding Construction | Finebesteel vs. SEOJEON ELECTRIC MACHINERY | Finebesteel vs. Seoul Semiconductor Co |
| ICD vs. Samsung Electronics Co | ICD vs. Samsung Electronics Co | ICD vs. LG Energy Solution | ICD vs. SK Hynix |
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 CEOs Directory module to screen CEOs from public companies around the world.
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