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
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finebesteel and Handok is -0.5. 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 generate 2.29 times more return on investment than Handok Clean. However, Finebesteel is 2.29 times more volatile than Handok Clean Tech. It trades about 0.0 of its potential returns per unit of risk. Handok Clean Tech is currently generating about -0.06 per unit of risk. If you would invest 111,500 in Finebesteel on September 2, 2024 and sell it today you would lose (6,800) from holding Finebesteel or give up 6.1% 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.The idea behind Finebesteel and Handok Clean Tech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Handok Clean vs. Busan Industrial Co | Handok Clean vs. Busan Ind | Handok Clean vs. Mirae Asset Daewoo | Handok Clean 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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