Correlation Between Finebesteel and STCube
Can any of the company-specific risk be diversified away by investing in both Finebesteel and STCube 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 STCube into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and STCube Inc, you can compare the effects of market volatilities on Finebesteel and STCube 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 STCube. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and STCube.
Diversification Opportunities for Finebesteel and STCube
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finebesteel and STCube is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and STCube Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STCube Inc 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 STCube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STCube Inc has no effect on the direction of Finebesteel i.e., Finebesteel and STCube go up and down completely randomly.
Pair Corralation between Finebesteel and STCube
Assuming the 90 days trading horizon Finebesteel is expected to generate 0.55 times more return on investment than STCube. However, Finebesteel is 1.82 times less risky than STCube. It trades about -0.05 of its potential returns per unit of risk. STCube Inc is currently generating about -0.03 per unit of risk. If you would invest 176,000 in Finebesteel on September 12, 2024 and sell it today you would lose (73,000) from holding Finebesteel or give up 41.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finebesteel vs. STCube Inc
Performance |
| Timeline |
| Finebesteel |
| STCube Inc |
Finebesteel and STCube Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and STCube
The main advantage of trading using opposite Finebesteel and STCube positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, STCube 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 STCube will offset losses from the drop in STCube's long position.| Finebesteel vs. Dong Il Steel | Finebesteel vs. Seah Steel Corp | Finebesteel vs. Ni Steel | Finebesteel vs. Korea Steel Co |
| STCube vs. Samhyun Steel Co | STCube vs. Lotte Energy Materials | STCube vs. Finebesteel | STCube vs. BooKook Steel 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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