Correlation Between Finebesteel and HB Technology
Can any of the company-specific risk be diversified away by investing in both Finebesteel and HB Technology 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 HB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and HB Technology TD, you can compare the effects of market volatilities on Finebesteel and HB Technology 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 HB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and HB Technology.
Diversification Opportunities for Finebesteel and HB Technology
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finebesteel and 078150 is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and HB Technology TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HB Technology TD 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 HB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HB Technology TD has no effect on the direction of Finebesteel i.e., Finebesteel and HB Technology go up and down completely randomly.
Pair Corralation between Finebesteel and HB Technology
Assuming the 90 days trading horizon Finebesteel is expected to generate 0.78 times more return on investment than HB Technology. However, Finebesteel is 1.28 times less risky than HB Technology. It trades about 0.29 of its potential returns per unit of risk. HB Technology TD is currently generating about 0.22 per unit of risk. If you would invest 92,100 in Finebesteel on November 7, 2024 and sell it today you would earn a total of 14,400 from holding Finebesteel or generate 15.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finebesteel vs. HB Technology TD
Performance |
| Timeline |
| Finebesteel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| HB Technology TD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Finebesteel and HB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and HB Technology
The main advantage of trading using opposite Finebesteel and HB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, HB Technology 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 HB Technology will offset losses from the drop in HB Technology's long position.| Finebesteel vs. Eagle Veterinary Technology | Finebesteel vs. V One Tech Co | Finebesteel vs. Hanwha Chemical Corp | Finebesteel vs. Raontech |
| HB Technology vs. Samsung Electronics Co | HB Technology vs. Hyundai Motor Co | HB Technology vs. LG Electronics |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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