Correlation Between Finebesteel and Handok Clean
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Handok Clean 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 Handok Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Handok Clean Tech, you can compare the effects of market volatilities on Finebesteel and Handok Clean 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 Handok Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Handok Clean.
Diversification Opportunities for Finebesteel and Handok Clean
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finebesteel and Handok is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Handok Clean Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handok Clean Tech 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 Handok Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handok Clean Tech has no effect on the direction of Finebesteel i.e., Finebesteel and Handok Clean go up and down completely randomly.
Pair Corralation between Finebesteel and Handok Clean
Assuming the 90 days trading horizon Finebesteel is expected to under-perform the Handok Clean. In addition to that, Finebesteel is 1.73 times more volatile than Handok Clean Tech. It trades about -0.04 of its total potential returns per unit of risk. Handok Clean Tech is currently generating about -0.01 per unit of volatility. If you would invest 726,250 in Handok Clean Tech on November 4, 2024 and sell it today you would lose (102,250) from holding Handok Clean Tech or give up 14.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finebesteel vs. Handok Clean Tech
Performance |
| Timeline |
| Finebesteel |
| Handok Clean Tech |
Finebesteel and Handok Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and Handok Clean
The main advantage of trading using opposite Finebesteel and Handok Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Handok Clean 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 Handok Clean will offset losses from the drop in Handok Clean's long position.| Finebesteel vs. Camus Engineering Construction | Finebesteel vs. SEOJEON ELECTRIC MACHINERY | Finebesteel vs. Woori Technology | Finebesteel vs. KEPCO Engineering Construction |
| Handok Clean vs. Hironic Co | Handok Clean vs. Next Entertainment World | Handok Clean vs. Kaonmedia Co | Handok Clean vs. Korea Alcohol Industrial |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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