Correlation Between Finebesteel and Incar Financial
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Incar Financial 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 Incar Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Incar Financial Service, you can compare the effects of market volatilities on Finebesteel and Incar Financial 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 Incar Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Incar Financial.
Diversification Opportunities for Finebesteel and Incar Financial
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Finebesteel and Incar is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Incar Financial Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incar Financial Service 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 Incar Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incar Financial Service has no effect on the direction of Finebesteel i.e., Finebesteel and Incar Financial go up and down completely randomly.
Pair Corralation between Finebesteel and Incar Financial
Assuming the 90 days trading horizon Finebesteel is expected to generate 1.08 times more return on investment than Incar Financial. However, Finebesteel is 1.08 times more volatile than Incar Financial Service. It trades about 0.29 of its potential returns per unit of risk. Incar Financial Service is currently generating about 0.21 per unit of risk. If you would invest 84,000 in Finebesteel on August 29, 2024 and sell it today you would earn a total of 28,200 from holding Finebesteel or generate 33.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finebesteel vs. Incar Financial Service
Performance |
| Timeline |
| Finebesteel |
| Incar Financial Service |
Finebesteel and Incar Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and Incar Financial
The main advantage of trading using opposite Finebesteel and Incar Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Incar Financial 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 Incar Financial will offset losses from the drop in Incar Financial's long position.| Finebesteel vs. Dong Il Steel | Finebesteel vs. Seah Steel Corp | Finebesteel vs. Ajusteel Co | Finebesteel vs. Ni Steel |
| Incar Financial vs. Busan Industrial Co | Incar Financial vs. Busan Ind | Incar Financial vs. Shinhan WTI Futures | Incar Financial 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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