Correlation Between Finebesteel and Nasmedia
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Nasmedia 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 Nasmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Nasmedia Co, you can compare the effects of market volatilities on Finebesteel and Nasmedia 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 Nasmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Nasmedia.
Diversification Opportunities for Finebesteel and Nasmedia
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Finebesteel and Nasmedia is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Nasmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasmedia 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 Nasmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasmedia has no effect on the direction of Finebesteel i.e., Finebesteel and Nasmedia go up and down completely randomly.
Pair Corralation between Finebesteel and Nasmedia
Assuming the 90 days trading horizon Finebesteel is expected to generate 1.34 times more return on investment than Nasmedia. However, Finebesteel is 1.34 times more volatile than Nasmedia Co. It trades about -0.03 of its potential returns per unit of risk. Nasmedia Co is currently generating about -0.04 per unit of risk. If you would invest 211,500 in Finebesteel on October 25, 2024 and sell it today you would lose (101,500) from holding Finebesteel or give up 47.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finebesteel vs. Nasmedia Co
Performance |
| Timeline |
| Finebesteel |
| Nasmedia |
Finebesteel and Nasmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and Nasmedia
The main advantage of trading using opposite Finebesteel and Nasmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Nasmedia 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 Nasmedia will offset losses from the drop in Nasmedia's long position.| Finebesteel vs. Seah Steel Corp | Finebesteel vs. Ajusteel Co | Finebesteel vs. Ni Steel | Finebesteel vs. Korea Steel Co |
| Nasmedia vs. Busan Industrial Co | Nasmedia vs. Busan Ind | Nasmedia vs. RPBio Inc | Nasmedia vs. Finebesteel |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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