Correlation Between Finebesteel and Air Busan
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Air Busan 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 Air Busan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Air Busan Co, you can compare the effects of market volatilities on Finebesteel and Air Busan 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 Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Air Busan.
Diversification Opportunities for Finebesteel and Air Busan
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finebesteel and Air is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan 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 Air Busan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Busan has no effect on the direction of Finebesteel i.e., Finebesteel and Air Busan go up and down completely randomly.
Pair Corralation between Finebesteel and Air Busan
Assuming the 90 days trading horizon Finebesteel is expected to under-perform the Air Busan. In addition to that, Finebesteel is 1.28 times more volatile than Air Busan Co. It trades about -0.04 of its total potential returns per unit of risk. Air Busan Co is currently generating about -0.05 per unit of volatility. If you would invest 447,000 in Air Busan Co on October 18, 2024 and sell it today you would lose (222,000) from holding Air Busan Co or give up 49.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finebesteel vs. Air Busan Co
Performance |
| Timeline |
| Finebesteel |
| Air Busan |
Finebesteel and Air Busan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and Air Busan
The main advantage of trading using opposite Finebesteel and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Air Busan 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 Air Busan will offset losses from the drop in Air Busan's long position.| Finebesteel vs. Aprogen Healthcare Games | Finebesteel vs. DB Financial Investment | Finebesteel vs. KTB Investment Securities | Finebesteel vs. SBI Investment KOREA |
| Air Busan vs. Hwangkum Steel Technology | Air Busan vs. Finebesteel | Air Busan vs. FNSTech Co | Air Busan vs. Insun Environment New |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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