Correlation Between Finebesteel and Mgame Corp
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Mgame Corp 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 Mgame Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Mgame Corp, you can compare the effects of market volatilities on Finebesteel and Mgame Corp 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 Mgame Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Mgame Corp.
Diversification Opportunities for Finebesteel and Mgame Corp
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finebesteel and Mgame is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Mgame Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mgame Corp 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 Mgame Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mgame Corp has no effect on the direction of Finebesteel i.e., Finebesteel and Mgame Corp go up and down completely randomly.
Pair Corralation between Finebesteel and Mgame Corp
Assuming the 90 days trading horizon Finebesteel is expected to under-perform the Mgame Corp. In addition to that, Finebesteel is 1.14 times more volatile than Mgame Corp. It trades about -0.04 of its total potential returns per unit of risk. Mgame Corp is currently generating about -0.02 per unit of volatility. If you would invest 782,502 in Mgame Corp on October 13, 2024 and sell it today you would lose (259,502) from holding Mgame Corp or give up 33.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.83% |
| Values | Daily Returns |
Finebesteel vs. Mgame Corp
Performance |
| Timeline |
| Finebesteel |
| Mgame Corp |
Finebesteel and Mgame Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and Mgame Corp
The main advantage of trading using opposite Finebesteel and Mgame Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Mgame Corp 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 Mgame Corp will offset losses from the drop in Mgame Corp's long position.| Finebesteel vs. LS Materials | Finebesteel vs. Union Materials Corp | Finebesteel vs. Hana Materials | Finebesteel vs. Daou Data Corp |
| Mgame Corp vs. EV Advanced Material | Mgame Corp vs. Finebesteel | Mgame Corp vs. Hyundai Engineering Plastics | Mgame Corp vs. LAKE MATERIALS LTD |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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