Correlation Between Finebesteel and Korea Computer
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Korea Computer 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 Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Korea Computer, you can compare the effects of market volatilities on Finebesteel and Korea Computer 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 Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Korea Computer.
Diversification Opportunities for Finebesteel and Korea Computer
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Finebesteel and Korea is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Korea Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Computer 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 Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Computer has no effect on the direction of Finebesteel i.e., Finebesteel and Korea Computer go up and down completely randomly.
Pair Corralation between Finebesteel and Korea Computer
Assuming the 90 days trading horizon Finebesteel is expected to under-perform the Korea Computer. In addition to that, Finebesteel is 1.05 times more volatile than Korea Computer. It trades about -0.03 of its total potential returns per unit of risk. Korea Computer is currently generating about 0.01 per unit of volatility. If you would invest 508,056 in Korea Computer on October 13, 2024 and sell it today you would lose (56.00) from holding Korea Computer or give up 0.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finebesteel vs. Korea Computer
Performance |
| Timeline |
| Finebesteel |
| Korea Computer |
Finebesteel and Korea Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and Korea Computer
The main advantage of trading using opposite Finebesteel and Korea Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Korea Computer 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 Computer will offset losses from the drop in Korea Computer's long position.| Finebesteel vs. MediaZen | Finebesteel vs. MEDIANA CoLtd | Finebesteel vs. Hana Financial | Finebesteel vs. Lotte Non Life Insurance |
| Korea Computer vs. NICE Information Service | Korea Computer vs. Finebesteel | Korea Computer vs. Daehan Steel | Korea Computer vs. Jeil Steel Mfg |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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