Correlation Between Finebesteel and Green Cross
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Green Cross 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 Green Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Green Cross Lab, you can compare the effects of market volatilities on Finebesteel and Green Cross 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 Green Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Green Cross.
Diversification Opportunities for Finebesteel and Green Cross
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finebesteel and Green is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Green Cross Lab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cross Lab 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 Green Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cross Lab has no effect on the direction of Finebesteel i.e., Finebesteel and Green Cross go up and down completely randomly.
Pair Corralation between Finebesteel and Green Cross
Assuming the 90 days trading horizon Finebesteel is expected to generate 1.22 times less return on investment than Green Cross. In addition to that, Finebesteel is 2.26 times more volatile than Green Cross Lab. It trades about 0.16 of its total potential returns per unit of risk. Green Cross Lab is currently generating about 0.44 per unit of volatility. If you would invest 2,210,000 in Green Cross Lab on November 27, 2024 and sell it today you would earn a total of 225,000 from holding Green Cross Lab or generate 10.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finebesteel vs. Green Cross Lab
Performance |
| Timeline |
| Finebesteel |
| Green Cross Lab |
Finebesteel and Green Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and Green Cross
The main advantage of trading using opposite Finebesteel and Green Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Green Cross 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 Green Cross will offset losses from the drop in Green Cross' long position.| Finebesteel vs. Sejong Industrial | Finebesteel vs. Korean Reinsurance Co | Finebesteel vs. Songwon Industrial Co | Finebesteel vs. Choil Aluminum |
| Green Cross vs. Dongil Metal Co | Green Cross vs. Coloray International Investment | Green Cross vs. Eagon Industrial Co | Green Cross vs. Hyunwoo Industrial 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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