Correlation Between Finebesteel and Jin Air
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Jin Air 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 Jin Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Jin Air Co, you can compare the effects of market volatilities on Finebesteel and Jin Air 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 Jin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Jin Air.
Diversification Opportunities for Finebesteel and Jin Air
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Finebesteel and Jin is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Jin Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jin Air 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 Jin Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jin Air has no effect on the direction of Finebesteel i.e., Finebesteel and Jin Air go up and down completely randomly.
Pair Corralation between Finebesteel and Jin Air
Assuming the 90 days trading horizon Finebesteel is expected to generate 1.92 times more return on investment than Jin Air. However, Finebesteel is 1.92 times more volatile than Jin Air Co. It trades about 0.3 of its potential returns per unit of risk. Jin Air Co is currently generating about -0.06 per unit of risk. If you would invest 94,700 in Finebesteel on November 9, 2024 and sell it today you would earn a total of 17,300 from holding Finebesteel or generate 18.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finebesteel vs. Jin Air Co
Performance |
| Timeline |
| Finebesteel |
| Jin Air |
Finebesteel and Jin Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and Jin Air
The main advantage of trading using opposite Finebesteel and Jin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Jin Air 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 Jin Air will offset losses from the drop in Jin Air's long position.| Finebesteel vs. Alton Sports CoLtd | Finebesteel vs. iNtRON Biotechnology | Finebesteel vs. Display Tech Co | Finebesteel vs. Daou Technology |
| Jin Air vs. SM Entertainment Co | Jin Air vs. SKONEC Entertainment Co | Jin Air vs. Jeju Beer Co | Jin Air vs. Worldex Industry Trading |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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